0
Home
News
Directory
E-newsletter
Magazine
Events
Data
AgReport
Subscribe
Crop acreage estimates for 2018/19 in South America
Jun. 15, 2018
Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.
Farmers in South America will start planting their 2018/19 crops in 2-3 months, so now is a good time to take an early look at the potential crop acreage for the next growing season.
Brazil Soybean Acreage in 2018/19 might increase 3-5% - I am anticipating that the 2018/19 soybean acreage in Brazil might increase 3-4-5% in 2018/19. During the 2017/18 growing season, Brazilian farmers planted 35.09 million hectares of soybeans (86.6 million acres), which was an increase of 3.1% compared to 2016/17. I am anticipating that the Brazilian soybean acreage might increase 1.0 to 1.7 million hectares in 2018/19. A 3% increase would equate to a 1.0 million hectare increase, a 4% increase would equate to a 1.4 million hectare increase, and a 5% increase would equate to a 1.7 million hectare increase.
Several months ago, I was more confident that the increase would be near the top end of my range because Brazilian farmers were harvesting a record large crop, soybean prices were increasing, premiums at the ports were very high, the Brazilian currency was weakening, and there was uncertainty concerning the 2018 U.S. crop.
Today, I am less confident about the increase and I would probably be near the low end of my range. I am less confident due to the following reasons: recent international soybean prices have slumped, the 2018 U.S. soybean crop is off to a very good start, higher freight rates in Brazil will be passed along to farmers, the Brazilian currency is "all over the place" (see next article) and the Brazilian Central Bank has indicate that they will defend the currency, and there is increased economic and political uncertainty in Brazil.
Brazil Corn Acreage in 2018/19 might increase 4% - I am anticipating that the 2018/19 Brazilian corn acreage might increase 4% in 2018/19. During the 2017/18 growing season, farmers in southern Brazil planted 2.84 million hectares of full-season corn which was down 15.5% from 2016/17. During the 2017/18 growing season, farmers in central and southern Brazil planted 11.56 million hectares of safrinha corn, which was down 4.5% from 2016/17.
The current domestic corn prices in Brazil are quite good and I think the good prices might stop the recent decline in full-season corn acreage in southern Brazil. If farmers in southern Brazil returned to their corn acreage of two years ago, that would result in an increase of about 500,000 hectares of corn. If Brazilian farmers increased their safrinha corn acreage 1.5%, that would result in an increase of about 175,000 hectares. So combined, the corn acreage in Brazil might increase 675,000 hectares or a little more than 4%.
One factor that might limit the increase in corn acreage is cotton. Cotton prices are very good and as a result, it is expected that Brazilian farmers will increase their cotton acreage in 2018/19. Cotton competes with full-season corn for acreage in northeastern Brazil and cotton competes with safrinha corn for acreage in Mato Grosso.
Argentina Soybean Acreage in 2018/19 might increase 3% - Soybean acreage in Argentina has been in decline for several years, but I think that trend will be reversed in 2018/19. The soybean acreage declined because farmers opted for more corn because the corn export tax had been eliminated and the government promised to no longer interfere in the corn export market. Additionally, farmers wanted to do more crop rotations instead of basically planting a monocrop of soybeans year after year.
During the 2017/18 growing season, farmers in Argentina planted approximately 18.0 million hectares of soybeans, but they will harvest approximately 17.0 million hectares. The discrepancy is due to the severe drought that caused farmers to not plant some of their intended double crop soybeans or to abandon some of their soybeans.
In 2018/19, Argentine farmers might plant 18.5 million hectares of soybeans or an increase a little short of 3%. I think the soybean acreage will increase because soybeans are much cheaper to plant and soybean yields in Argentina are better than corn relatively speaking.
Farmers in Argentina are going to try and hold down their costs due to a number of factors including: farmers are coming out of the 2017/18 growing season under financial stress due to the very poor yields, the prime interest rate in Argentina is 40% so the interest rates on production loans would be even higher, there is a proposal to impose a 10% export tax on corn exports, and the weaker Argentine peso could increase their production costs. If farmers have limited financial resources, the best way to hold down costs is to plant soybeans.
Argentina Corn Acreage in 2018/19 might decline 2% - Corn has been gaining acreage in Argentina for several years, but I think that trend may not follow through in 2018/19. Corn is more expensive to plant than soybeans and farmers in Argentina may want to go with the cheaper crop due to the financial hardships caused by the disastrous crop production in 2017/18.
During the 2017/18 growing season, farmers in Argentina planted approximately 5.1 million hectares of corn and in the 2018/19 growing season, the corn acreage may ease back to 5.0 million hectares. The 100,000 hectare reduction would equate to approximately a 2% decline.
Summary - Early planting of the 2018/19 crops in South America will start in 2-3 months, but a lot can happen between now and then. If it looks like the U.S. is going to have bumper crops and commodity prices continue to decline, then maybe I am too optimistic concerning the acreages. If the U.S. ends up with disappointing crops, then the farmers in South America may be more aggressive with their planting intensions. And on top of all of this is the uncertainty surrounding trade negotiations between the United States with China, Canada, Mexico, the European Union and other countries.
Source: Soybeans&Corn Advisor
More from AgroNews
Change
Hot TopicSubscribe
| Subscribe Email: | * | |
| Name: | ||
| Mobile Number: | ||
Comment
0/1200
NEWSLETTER