High prices hearten farmers, and soybean area should grow in BR

Cepea, October 16, 2020 – The area allocated to soybean in the Brazilian 2020/21 season should be 2.5% larger, according to the first estimates from Conab (Brazil’s National Company for Food Supply). This increase – which reflects the attractive prices of the product, higher liquidity in the domestic market and the low risk of the activity, primarily when compared to other products that compete for area – is lower than the average in the last 15 years (of 4.7% per year), but similar to that in the last five years (of 2.7% per year).

 

According to Conab, the area to be sown with soybean in Brazil should total 37.88 million hectares, resulting in an output of 133.67 million tons, 7.1% higher than that in the previous season. Estimates consider an average productivity increase of 4.4%, underpinned by increases in Rio Grande do Sul (70%) and in Santa Catarina (7%).

 

Conab estimates exports to total 85 million tons in 2021, 3.7% up compared to that forecast for the 2019/20 season. Based on the firm demand for oil from biodiesel processors – which should increase from 12% (B12) to 13% (B13) –, Conab expects soybean consumption to be higher, although volume estimates have not been released yet.

 

CROPS – Sowing of the new crop advanced in Brazil in the first half of October. According to the agents consulted by Cepea, around 15% of the area had been sown in western and northern Paraná until Oct. 15. According to data from Deral/Seab, until October 6, activities had reached 8% of the state area in PR.

 

In western Mato Grosso, sowing had reached 6.47% of the area until October 2, according to Imea. However, on the average of the state, activities have reached 1% of the area, against 6.6% in the same period last year.

 

EXPORTS – Brazilian soybean exports were high in the first semester of 2020 and continue firm in the second half of the year. Data from Secex (Foreign Trade Secretariat) show that, from January to September, Brazil exported 79.3 million tons of soybean, 29.1% more than that in the same period last year – of this total, 72.8% were sent to China.

 

PRICES – Soybean prices increased in the Brazilian market in the first fortnight of October. The ESALQ/BM&FBovespa Index at Paranaguá port (PR) rose by 6% between Sept. 30 and October 15, closing at 157.01 BRL/bag (27.98 USD) on Oct. 15. The CEPEA/ESALQ Index in Paraná increased by 7.1% in the same period, to 156.62 BRL/60-kilo bag (27.91 USD/bag) on Oct. 15.

 

(Cepea-Brazil)

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