Brazil ups outlook for 2023-24 crop to 299mn t

Market: Agriculture
11/07/24

Brazil raised the outlook for its 2023-24 grain and oilseed crops for the third consecutive month in July, driven by favorable weather supporting the second corn crop.

National supply company Conab now expects 2023-24 output at 299.3mn metric tonnes (t), up by 1.7mn t from a month ago. But the projection for the current cycle is 6.4pc — or 20.5mn t — below the record 319.8mn t in 2022-23, following the negative effects of the El Nino weather phenomenon over main producing states earlier in the season.

The 2023-24 crop is set to yield 3,752 kg/hectare (ha), 7.9pc below the 4,072 kg/ha in the last cycle. That also compares with the 3,739 kg/ha forecast in June.

Estimated sowed area expanded by 170,200ha to 79.8mn ha this month, which is a 1mn ha tumble from the prior season's acreage.

Corn crop leads monthly gain

Conab expects Brazil to produce over 115.9mn t of corn in 2023-24, including the country's first, second and third crops.

Estimated volumes rose by 1.8mn t from the previous estimate of 114.1mn t, as the average yield outlook increased to 5,553 kg/ha from 5,478 kg/ha and the projection for planted area was up by 25,000ha to 20.9mn ha.

The 2022-23 corn crop produced a record 131.9mn t, with 22.3mn ha sowed and average yields of 5,923 kg/ha.

The 2023-24 second corn crop — also known as the winter crop — accounted for most of the upwards revision this month. The production forecast rose to 90mn t from 88.1mn t, but remained below the 2022-23 crop's 102.4mn t record.

Expected yields rose to 5,556 kg/ha from 5,478 kg/ha in June. That is also 6.7pc below the prior cycle's yields. As for planted area, the forecast increased by 47,000ha and was maintained at almost 16.2mn ha. The 2022-23 second corn crop was sowed in 17.2mn ha.

The summer corn cycle — also known as the first crop — is set to reach almost 23.4mn t, down by nearly 180,000t from a month prior and 3.9mn t below the last season.

The estimate for acreage decreased by 23,900ha, but remains at around 4mn ha, approximately 438,000ha below the 2022-23 planted area. Projected yields dropped to 5,852 kg/ha from 5,862 kg/ha, also down from last season's 6,160 kg/ha.

The outlook for the third corn crop — sowed exclusively in northern and northeastern states — continues at 2.4mn t, surpassing the prior cycle by 254,800t. Planted area is now set to reach 657,800ha, up by 2,800ha from the prior month's estimate and 632,500ha in 2022-23. The outlook for yields was down to 3,663 kg/ha from 3,670 kg/ha but is 7.5pc up on the year.

Soybean output decreases slightly

Brazil's 2023-24 soybean crop is set to total approximately 147.3mn t, following a 16,900t reduction from a month ago.

That is a 4.7pc drop from the 2022-23 season's record of 154.6mn t, but the cycle remains on track to be the second largest crop in the country's history.

The monthly output decrease reflects damage caused by floods in the Rio Grande do Sul state, which reduced its outlook by 540,000t to 19.7mn t. Losses were then mostly offset by an upwards revision in Para state, where higher yields and an increase in expected area rose the output forecast to almost 4.1mn t.

National average yields are now estimated at 3,202 kg/ha, down from 3,205 kg/ha in June and 3,507 kg/ha in 2022-23.

Conab projects that the 2023-24 soybean crop was sowed at a record of 46mn ha, compared with 44.1mn ha in the prior cycle.

Wheat, cotton down

Brazil's 2024 wheat production is now set to total almost 9mn t, down by 109,500t on the month and 859,000t above last year's output.

Yields are down to 2,917 kg/ha from 2,945 kg/ha, while the expected planted area continues at approximately 3.1mn ha. That compares with 2,331 kg/ha and almost 3.5mn ha in 2023.

The monthly downwards revision was driven by a lower outlook in Goias state, which struggled with excessive rainfall in the beginning of the cycle, fungal diseases and most recently water stress during the grain filling stage of crops.

The forecast for 2023-24 cotton lint fell by 20,900t and is now at 3.6mn t, which is 462,900t — or 14.6pc — above the prior season's output.

The yearly increase is driven by a higher expected acreage of 1.9mn ha, almost 17pc above the 2022-23 season and roughly stable from a month ago. Yields were down to 1,870kg/ha from 1,881kg/ha in June, which is 2pc below the prior season.

Corn, soybean exports stable

Conab continues to project 2023-24 corn exports to total 33.5mn t, despite an increase in expected production.

Volumes remain below the 54.6mn t shipped in the prior cycle.

But the outlook of domestic consumption rose to 84.3mn t from almost 84.2mn t a month ago — about 5.7pc above the prior season — led by a record demand from the corn ethanol and animal feed sectors.

Soybean exports also continue set to reach 92.4mn t, down from almost 101.9mn t of soybeans exported in the 2022-23 season.

By Nathalia Giannetti

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