(Reuters) – Brazil’s government trimmed its 2011/12 soybean crop estimate on Tuesday after drought ravaged output in the world’s second biggest producer this season, but raised its forecast of corn output to a record.
U.S. soybean futures rose after Brazil’s food supply agency Conab cut its production forecast and U.S. crop ratings disappointed.
Brazil’s soy crop that finished harvest in May is now estimated at 66.37 million tonnes, after drought erased about 10 million tonnes from crop’s potential, Conab data showed. The latest output number is down slightly from last month’s estimate of 66.68 million tonnes.
Carry-over stocks of soybeans are set to drop to 1 million tonnes, Conab estimates, their lowest since 2008/09 and down about 65 percent from last year. No major revisions to the soy crop are expected in the coming months. Brazil harvested a record 75.3 million tonnes the year before.
Despite the drought, corn production jumped in Conab’s ninth forecast of the grain crop to a record 67.79 million tonnes from the 65.90 million projected a month ago. It is the first time in over a decade that Brazil will harvest less soy than corn, which is mostly consumed by the local pork and poultry industry.
Producers have shifted more of their corn planting to the winter crop recently. This winter, or second crop, that is planted from January to March leapt 53 percent from last year to 32.9 million tonnes. The winter crop will be harvested in the coming weeks.
Main, or summer crop corn output was down 3 percent at 34.9 million tonnes.
Brazilian grain exports this year will move in accordance with the annual shift in output numbers. Soy shipments will fall to 31.1 million tonnes for the current crop from the 33 million tonnes of the previous crop, Conab estimates. This has helped support international and local prices. Producers are planning a big soy planting campaign for the next season that begins in September as supply and demand fundamentals shift in its favor versus corn.
Corn shipments were projected to rise to a record 11 million tonnes from the 9.49 million tonnes exported last season. The Middle East and Europe are the main importers of Brazilian corn.
Conab also said carry-over stocks for corn this year will reach an unprecedented 16 million tonnes, up more than 75 percent from last year’s corn stocks. The jump in corn supplies from Brazil and the expected bumper crop out of the United States will likely weaken local prices going forward, analysts said.
Output of soft wheat this year in Brazil, one of the world’s top importers of the grain, will fall about 11 percent to 5.1 million tonnes from last season’s 5.79 million tonnes. Brazil has been exporting more of its animal feed quality wheat to the Middle East in past years.
The government’s cotton lint estimate edged up to 1.97 million tonnes from the 1.95 million tonnes forecast in May. (Reporting by Reese Ewing and; Fabiola Gomes)
