Estimates coming out of Brazil so far peg that country’s 2007-2008 soybean plantings anywhere from 2.4 to 7% higher than a year earlier due largely to stronger prices and last year’s good crop production.
Factors that are seen limiting the increase in Brazil’s soybean plantings include the appreciation of the Brazilian real against the dollar; high producer debt loads; rising input costs, particularly for fertilizer and seed; and the attractiveness of alternative crops such as sugarcane, cotton and corn.
The consulting company Celeres on Monday estimated that Brazil’s 2007-2008 soybean crop would rise by 5.4% to 21.94 million hectares.
Celeres forecast output of next year's crop would rise to a record 61.47 million metric tons, up 4.2% from the current crop.
"The gain in the real, that has affected the profitability of soybean producers, prevented the planting of almost 1.3 million hectares, despite the local record prices," said Celeres in a report.
Celeres projected the average yield at 2,801 kg./hectare, down 1.2% compared with 2006-2007 due to the addition of lower-quality land for planting.
Last Friday, the Mato Grosso Soy Producers Association said it expected to see cultivated soybean area for 2007-2008 rise by about 6% over the 2006-2007 level. Mato Grosso, Brazil’s largest soybean-producing state normally accounts for about 25% of the country’s production.
"We expect to have an increase in the area of about 6% from last year where the planted area was 5.5 million hectares. It's going to be between 300,000-400,000 more hectares," Ricardo Silva, vice president of the association, told Dow Jones Newswires in an interview.
Silva said the latest figure for Mato Grosso was based on a field investigation that ended last month, which also projects yields will reach at least the average of last year when Mato Grosso soy fields produced 2.8 metric tons/hectare.
On July 27, another consulting firm, Safras & Mercados, projected Brazilian soybean plantings would range from 20.565 to 22.045 million hectares. The midpoint of that range, at 21.035 million hectares, represents an increase of only 2.4% from 2006-2007 plantings.
Prior to that, the firm AgRural predicted a 7% increase in soybean planted area and also predicted that production will rise 7% to 63.3 million metric tons in 2007-2008 from 59.3 million tons in 2006-2007.
AgRural noted that strong fertilizer and farm equipment sales indicated producer optimism about the upcoming growing season.
Editor’s 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.