The seventh estimate for Brazil's 2023/2024 grain harvest, released by the National Supply Company (Conab) on Thursday (11), indicates that the country's grain production is expected to reach a total of 294.1 million tons, representing an 8% decrease from the previous season, or 25.7 million tons less to be harvested. With a stable area estimated at 78.53 million hectares, the decrease is primarily attributed to the strong intensity of the El Niño phenomenon, which negatively influenced crop development in the country's producing regions from planting to maturation stages. This has impacted the average productivity, which dropped from 4,072 kilograms per hectare to 3,744 kg/ha.
Focus on Second and Third Crop Development
As the first crop harvest phase nears completion, attention turns to the development of second and third crop plantations, as well as winter crops. Climatic conditions remain a predominant factor in determining the final outcome of the current cycle. Compared to the previous forecast released by the Company in early March, there is a reduction in total production by 1.52 million tons, with the largest declines observed in corn, 1.79 million tons, and soybeans, 336.7 thousand tons. On the other hand, rice, cotton, sesame, sorghum, and especially beans show prospects for increased production compared to the last survey.
Soybean and Corn Production Outlook
With harvesting work advanced in the main producing states, reaching around 76.4% of the cultivated area in the country, the estimated soybean production is 146.52 million tons, a 5.2% reduction from the previous harvest. This reduction is attributed to low precipitation and above-normal temperatures in the main producing regions of the Midwest and Southeast, causing planting delays and productivity losses.
Corn, the main crop cultivated in the second season, has a total estimated production of 110.96 million tons. According to the Crop Progress report published by Conab this week, harvesting work for the first season of the cereal, when a production of 23.36 million tons is expected, has reached 51% of the cultivated area. The sowing of the second season is nearly completed.
Prospects for Other Crops
The second crop of beans is expected to increase production by 18.4%, with an estimated harvest of 1.5 million tons. This performance contributes to the internal supply of an important product consumed by Brazilians, as the current estimate for the legume is a total production of 3.2 million tons. A recovery scenario is also observed for rice, with an estimated production of 10.57 million tons, 5.3% higher than the previous cycle.
The cultivated area of cotton is also growing, increasing from 1.7 million hectares to 1.9 million hectares, mainly justified by good market prospects. Weather conditions continue to favor crops, with an estimated harvest of about 3.6 million tons of lint, up by 13.4%. For wheat, the current estimate indicates a production of 9.73 million tons.
Market Implications
Conab adjusted its export estimates for corn in the 2023/24 crop, as the total production of the cereal was reduced. As a result, the new expectation is for a volume of 31 million tons shipped, a 43.3% decrease from the previous cycle. Domestic consumption is projected at around 84 million tons of grain.
For beans, the increase in production allows for an increase in the legume's carryover stock. Projections for rice in the supply framework remained virtually unchanged, with the Company estimating an expansion of national consumption to 10.5 million tons.
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