Brazil’s 2016-17 soybean production is expected to be a record high.
WASHINGTON, D.C., U.S. — Since the beginning of November, the U.S. dollar appreciated against the Brazilian real by 5.3% as a result of the domestic political scenario, as well as international developments such as the U.S. elections, the U.S. Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) said in a Dec. 1 report. With this situation, the expectation is that domestic soybean prices in reals may increase further due to the stronger dollar, which would translate into more Brazilian reals when converted.

Due to the current currency volatility, commercialization of the 2016-17 crop is still below last year’s pace. Producers continue to be more strategic with their selling strategy as they expect a rebound in domestic soybean prices in the next few months, the report said.

According to various state sources, less than 40% of the forecasted 2016-17 soybean production has been contracted, which is about 16% lower compared to last year.

Brazil’s 2016-17 soybean production is forecast at 101 million tonnes, a record, due to a larger planted area compared to last year and higher yields based on trend.  Soybean exports for Brazil are forecast at 57 million tonnes for 2016-17, the report said. China will remain the main destination for Brazilian soybeans. It is expected that demand for soybeans in China will remain strong. Chinese soybean imports are supported by a growing domestic demand and a large domestic crushing capacity.