Brazil Farmers on Course to Collect New Record Soy Crop

(NASDAQ) – Brazil is expected to harvest a record soybean crop in the 2018/19 season as good weather and strong Chinese demand set farmers on course to produce a new bumper crop, a Reuters poll showed on Friday.

Farmers are poised to collect nearly 121 million tonnes in the current cycle, a 1.2 percent increase from last year, according to the average estimate of 13 forecasters. Harvesting is set to begin as early as December thanks to a favorable climate in Brazil’s agricultural heartland, analysts have said.

“Soy development is very accelerated,” said Aedson Pereira, an analyst with consultancy IEG FNP.

He noted farmers in Mato Grosso, Brazil’s largest soy state, are likely to start collecting their beans in the second half of December. As such, producers may have harvested up to 15 percent of the soy area in Brazil by the end of January, Pereira said.

That would be more than double a five-year average of 6.3 percent for the month, according to data from consultancy AgRural.

With more supplies available that early in the season, Brazil will increase competition with the United States, its biggest soy exporting rival, which is embroiled in a trade war with China.

The spat, which fueled Brazilian soybean exports this year during months when the U.S. crop is already available, has left U.S. farmers’ bins filled to the brim with soy they cannot push out.

CORN

The outlook for Brazil’s first corn, harvested in the summer, is also promising, with the average of 10 consultants polled predicting production at 27.79 million tonnes, a 3.6 percent rise from the previous year due to the weather and a rise of planted area.

This year, Brazilian corn farmers planted 5.46 million hectares, a 7.4 percent increase from the previous season. The rise in area was driven by farmers’ expectations of higher corn prices, according to Victor Ikeda, an analyst at Rabobank.