Conab forecasts increased soybean, corn, and cotton production in Brazil

Date:08-29-2022

In their first forecast for the 2022/23 Brazilian crops issued on last Wednesday, Conab is projecting an increase in soybean, corn, and cotton production. Brazil's total grain production in 2022/23 is forecasted at 308 million tons or an increase of 14% compared to last year. Despite higher production costs, Brazilian farmers are expecting healthy profit margins for their grain production. Conab will issue their first state-by-state crop estimates in their October Crop Report.

Soybeans - Conab is forecasting that the 2022/23 soybean crop will be 150.3 million tons, which represents an increase of 21% compared to last year. The soybean acreage is forecasted to increase 3.5% to 42.5 million hectares (104.9 million acres). Soybean yields are expected to rebound from disappointing yields last year. Brazil's soybean exports are expected to increase 22% to 92 million tons. According to Conab's president, despite an increase in production costs, soybeans still have good liquidity and profitability.

Corn - Brazil's 2022/23 corn production is forecasted to be 125.5 million tons. The first corn crop acreage is expected to decline slightly with a production of 28.9 million tons. The safrinha corn acreage and yield are expected to increase in 2022/23 with production estimated at 94.5 million tons or an increase of 8.2%. The safrinha corn acreage is directly related to the soybean acreage since it is double cropped after the soybeans are harvested. If the soybean acreage increases, the safrinha corn acreage generally increases as well. The safrinha corn crop accounts for approximately 75% of Brazil's total corn production. The third corn crop production is expected to be relatively unchanged at 2.5 million tons. Brazil's corn exports could set a record at 44.5 million tons.

Cotton - Brazil's cotton acreage and yield are expected to increase in 2022/23 with fiber production estimated at 2.92 million tons. Strong cotton prices and good margins are incentivizing cotton producers to increase their production. Brazil is expected to export 2 million tons of cotton in 2023. World economic uncertainty could limit the cotton expansion especially for the safrinha cotton which will not be planted until next January.

Rice - Rice acreage is expected to decline in 2022/23 due to the high cost of production and weak rice prices. The state of Rio Grande do Sul is the number one rice producing state in Brazil and farmers in the state are replacing some of their rice with more profitable crops such as soybeans and corn.