WASHINGTON, D.C., U.S. — Brazil maintained its 2015-16 production forecast of soybeans to 98.5 million tonnes due to a larger planted area compared to last year and yields based on trend, the U.S. Department of Agriculture (USDA) Foreign Agricultural Service (FAS) reported on Nov. 17. Brazil forecasts area planted at 33 million hectares. The planting season, which started on Sept. 15 in most states, continues to face delays due to weather problems and lower than expected precipitation. As of Nov.13, various sources estimate planting progress in Brazil at over 60%, just below last year, but much lower than the five-year average of 70%.
Weather concerns are keeping farmers uneasy. Despite good rains in late October and early November, the states of Goais and Bahia are way behind their five-year average. In Bahia and other states in the north and northeast, concerns remain high about dryness. Planting in Bahia was 8% complete Nov. 13, well behind from the five-year average of 27% at this stage. Other states like Mato Grosso, Paraná, and Mato Grosso do Sul, have caught up the pace compared to last year, but still behind the five-year average.
In general, the concern in Brazil is the forecast by meteorologists that El Niño will have a major impact in precipitation this year, especially in the north and northeast. If this is the case, it can have an impact on the expected yields in eastern Goias as well as the region known as MATOPIBA (Maranhao, Tocantins, Piaui, and western Bahia).
Brazil kept its export forecast at 55 million tonnes for 2015-16 market year. The forecast was increased last month due to the fast pace of forward contracts of the crop currently being planted in Brazil. The fast commercialization of the new crop is directly linked to the sharp devaluation of the Brazilian real, which is making Brazilian soybeans more competitive.
China will remain the main destination for Brazilian soybeans. It is expected that demand for soybeans in China will remain strong despite the economic slowdown. Chinese soybeans imports are supported by a growing domestic demand and a large domestic crushing capacity. The current lower global soybean prices and the weaker Brazilian Real are making Brazil more competitive and are encouraging Chinese importers to buy more. Since market year 2012-13, over 70% of Brazilian soybean exports are destined to the Chinese market.