Nov 13, 2014

2014/15 Brazil Wheat Crop Revised Downward

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

In their November report, Conab reduced their latest estimate of the 2014 /15 wheat crop in Brazil from 7.6 million tons in October to 7.0 million tons in November. The biggest reduction came from the state of Rio Grande do Sul where persistent wet weather during the harvest has resulted in lower yields and poor quality grain.

The wheat yields in Rio Grande do Sul were originally estimated at 2,700 kg/ha (approximately 39 bu/ac), but they have been revised downward to 2,190 kg/ha (approximately 31.7 bu/ac) with the possibility that they may go even lower as the harvest progresses. Additionally, much of the wheat that has been harvested in the state is of poor quality and only suited for animal feed. The current wheat production in the state is estimated at 2.49 million tons or 23% less than originally anticipated and 21% less than last growing season.

According to Conab, for the last six years, the wheat production in Brazil has averaged 5.7 million tons and the domestic consumption has averaged 10.7 million tons. For the 2014/15 harvest, the production is estimated at 7.0 million tons and the domestic demand is estimated at 12.2 million tons resulting with the need to import approximately 5.5 million tons or more depending on the quality of the Brazilian wheat.

Other agencies such as Trigo & Farinhas in Brazil and the USDA in the United States estimate the Brazilian wheat crop even lower at 6.3 million tons.

If the lower production estimates are verified, that means that Brazil will need to import at least 6 million tons of high quality wheat with approximately 4 million tons from Argentina and 1.5 million tons from the United States. Some of the poor quality wheat being harvested in Brazil is already being sold to exporters for shipment to Thailand and other Southeast Asian destinations for animal feed.