Brazil Soy Estimate As Expected

In its first official projection of Brazil’s 2006-07 soybean production, the Brazilian agriculture ministry confirmed expectations for lower planted area, but indicated production might be higher than a year ago due to higher yields.

Conab, the supply arm of Brazil’s agriculture ministry pegs 2006-07 soybean production in a range of 53.5-55 million metric tons (1.966-2.021 billion bushels), compared with its 2005-06 production estimate of 53.4 million tons.

USDA currently estimates Brazil’s 2006-07 soy crop at 56 million metric tons, compared with 2005-06 production of 55 million tons.

Conab forecasts that Brazil’s new-crop soybean plantings will fall within a range of 20.53-21.10 million hectares (50.6-52.1 million acres) or 5.1-7.6% lower than a year ago.

High debts built up by producers over the previous three growing seasons were cited as the main reason for lower acreage.

Declines in planted area are expected to be greater in Brazil’s large center-west producing areas, while soy acreage in southern Brazil is forecast to rise slightly.

The official acreage projection was generally in line with most trade estimates coming out of Brazil.

In the same report, Conab forecasts Brazil's total corn output for the coming (Oct./Sept.) crop year at 41.9-42.9 million tons, compared with the 41.7 million tons harvested in 2005-06.

The country's winter wheat crop was estimated at 2.44 million tons, down sharply from the 4.87 million tons harvested in 2005/06 due to poor weather, Conab says.

Editors note: Richard Brock, The Corn and Soybean Digest's > Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at

http://www.brockreport.com/brockreport.