The Brazilian soybean harvest is progressing well according to last week’s crop update from the country’s National Supply Company (Conab), however, production estimates continue to decline as doubts emerge that production gains in the later sown crops will offset poor output in the early harvested areas.

According to Conab, 29.4 per cent of the planted soybean area had been harvested as of February 17, up from 20.9 per cent seven days earlier and 6.4 percentage points ahead of the 2023 harvest pace. This official estimate is slightly behind that of agribusiness consultancy AgRural, who were calling the crop 32 per cent harvested by February 15, a nine percentage point advance on the previous week’s report, and up from their estimate of 25 per cent at the same time last year.

The soybean harvest in Brazil has entered its peak period, with as much as 50 per cent of the 45 million hectares planted in the 2023/24 campaign expected to be harvested in the four weeks to March 20. This should see the 2024 harvest pass the 80 per cent completion threshold well before the end of next month. By the end of March last year, the harvest was only 69 per cent completed, and at the same time in the 2021/22 cycle, it was 76 per cent done.

In Mato Grosso, Brazil’s biggest soybean-producing state, 65 per cent of the planted area had been harvested by February 17, an advance of 13.5 percentage points across the week. This is up from 60 per cent on February 12 and 7.2 percentage points ahead of the five-year average. The early harvested fields in the mid-north and western regions have had the poorest yields thus far, with the picture progressively improving as the headers moved south and east.

According to respected Brazilian agribusiness Agroconsult, the areas planted in the Mato Grosso between the beginning of September and mid-October, which corresponds to around 40 per cent of the state’s total planted area, were the most affected by high temperatures and low rainfall in the last quarter of 2023 and early 2024. Agroconsult is calling the average state yield 3.15 metric tonne per hectare, 17.7 per cent lower than last year.

With the early yields proving quite disappointing, Brazilian production estimates continue to decline. Early this month, Conab slashed 5.8 million metric tonne off its January crop estimate of 155.2mmt to be currently sitting on 149.4mmt. This is now 3.4 per cent lower than the 2022/23 crop of 154.6mmt and 7.8 per cent under Conab’s initial 2023/24 estimate of 162mmt. This projection is lower than Agroconsult, which last week cut its forecast from 153.8mmt to 152.2mmt, but the USDA lags the market sentiment and is still on 156mmt in its February supply and demand update. Conab also trimmed the planted area last week by 200,000 hectares to 45 million hectares.

Respected row crop analyst Dr Michael Cordonnier is more pessimistic about Brazil’s soybean production prospects. In last week’s crop update, he sliced his estimate by another 2mmt to 145mmt, citing concerns that higher yields from the later maturing crops will not be able to fully compensate for poor yields in the early maturing soybeans. Only a week earlier, the Cordonnier estimate had been cut by 2mmt, which followed a 4mmt reduction in January. On the whole, Cordonnier is seeing yields 10 to 20 per cent lower than early expectations, depending on the location, and has a lower bias moving forward should the disappointing yield trend continue.

Meanwhile, harvesting of the first corn crop and planting of the second corn crop are both progressing well relative to the 2022/23 operations. The summer corn harvest advanced 2.8 percentage points in the week to February 17 to be 21.4 per cent completed. This is 7.5 percentage points ahead of the same week last year.

Conab is currently calling summer corn production 23.6mmt, down from its January estimate of 24.4mmt and 13.8 per cent lower than the 2022/23 crop of 27.4mmt. The summer crop, which accounts for around 21 per cent of total corn output, reportedly faced adverse conditions such as extreme rainfall in the southern states and low rainfall in the central and western growing regions, which, accompanied by high temperatures, have negatively impacted crop yield. Conab has the area at 3.9 million hectares, 11.5 per cent lower than the 4.4 million hectares seeded in 2022/23.

Planting of the safrinha corn crop progressed 13.8 percentage points in the week to February 17 to be 45.3 per cent executed, according to Conab, 12 percentage points ahead of this time last year. AgRural sees the planting program far more advanced, calling it 59 per cent completed after improving by 21 percentage points over the week.

However, the ideal safrinha corn planting window is generally considered to close on February 20, which means that a significant proportion of this year’s crop will be seeded outside that window, whichever number you believe. While there is rain forecast for the balance of February, the longer-term guidance for March and April is hot and dry.

Weather through March and April is critical to second-crop yields. The correlation between March/April precipitation and yield performance is strong, particularly in Mato Grosso and Goias, which collectively account for around 53 per cent of Brazil’s safrinha corn output. Rainfall of at least 250 millimetres is required across the two months to ensure trend to above-trend yields, especially accounting for the already depleted soil moisture reserves. The lower the March rainfall outcome, the more required in April to set the crop up before the monsoon retreats in early May.

Safrinha corn output is also declining, with Conab lowering its estimate early in the month by 3.2mmt to 88mmt. This is 13.9 per cent below the 102mmt safrinha harvest last year. The reduction results from both suboptimal growing conditions, the hot and dry forecast and a lower planted area. Conab has decreased the second corn crop area from 16.4 million hectares last month to 15.8 million hectares in its early February update, 7.6 per cent lower than the 17.2 million hectares sown by Brazilian farmers’ last season.

Conab is pegging total 2023/24 corn production at 113.7mmt, 13.8 per cent lower than its 2023 harvest output of 131.9mmt, once output from the minor third corn crop is added. This compares to Cordonnier’s latest projection of 112mmt, unchanged week-on-week but down from 117mmt at the beginning of January. Cordonnier has a lower bias, with a continued decline in the planted area, a real possibility if the hot and dry March forecast plays out. The USDA currently leads the forecast field with a prognosis of 124mmt, down from its final 2023/23 number of 137mmt.

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