Jul 17, 2023

Safras & Mercado Forecasts Brazil Soy to Increase 4.5% in 2023/24

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

In their first estimate of the 2023/24 growing season, the Brazilian consulting firm Safras & Mercado is estimating that Brazil's 2023/24 soybean production will increase 4.5% to 163.2 million tons.

They estimate that Brazilian farmers will increase their soybean acreage in 2023/24 by 2.5% to a new record of 45.6 million hectares (112.6 million acres). The increase will come from the conversions of pastures to row crops, the clearing of new land, and the switching of first crop corn to soybeans. The percentage increase is less than in recent years due to lower commodity prices according to Safras & Mercado's soybean analysts Luiz Fernando Roque.

In addition to increased acreage, soybean production in the state of Rio Grande do Sul is expected to rebound after three consecutive years of drought plagued production. With the onset of El Nino, rainfall in the state is forecasted to return to more normal levels during the 2023/24 growing season. Rio Grande do Sul is generally the third largest soybean producing state in Brazil after Mato Grosso and Parana.

Brazilian corn production in 2023/24 is expected to decline 2 million tons to 137.4 million according to Safras & Mercado's corn analysts Paulo Molinari. (Safras & Mercado's 2022/23 corn estimate is higher than most of the other private and governmental estimates). Corn acreage is forecasted to decline 200,000 hectares to 22 million (54.3 million hectares) due to low corn prices. The first corn crop acreage is projected to decline 100,000 hectares to 4.08 million (10.0 million acres) as farmers switch some of the first corn crop acreage to soybeans instead. The safrinha corn acreage is also forecasted to decline 100,000 hectares to 15.4 million (38.0 million acres) also due to low corn prices.

Brazilian farmers who did not forward contract some of their anticipated 2022/23 safrinha corn production when corn prices were higher, or if they had lower corn yields, probably will fail to break even on their 2022/23 safrinha corn production.

The Brazilian acreage projections could still change before planting due to changing market conditions. Brazilian farmers will start planting their 2023/24 corn in southern Brazil in late August and early September. Soybean planting in Brazil will start in mid-September or with the return of the summer rains.