The harvest in the largest global producer and exporter of the oilseed will grow with an increase of 2.8% in the planted area, to 45.3 million hectares and a 2.2% increase in productivity, to 3,585 kilos per hectare.

Even with prices under downward pressure and loss of profitability, soybeans continue to be a crop with high profitability and liquidity, which influences an expectation of an increase in area in the next cycle, said Conab.

"The trend of low prices is associated with a supply shock, in which global soybean production is estimated for 2024 to be much higher than demand. Even so, profitability appears more positive, mainly due to the reduction in production costs. ..", explained the state-owned company's Agricultural Products Manager, Sérgio Roberto Santos.

In the case of the corn harvest, Conab estimated total production at 119.8 million tons, a reduction of 9.1% compared to the previous cycle, amid a 4.8% decline in the planted area, to 21 .2 million hectares, and expected productivity (-4.6%), after records in 2022/23.

The reduction in the corn planted area in Brazil (largest global exporter) was considered in light of a reduction in cereal prices on both the international and national markets.

"Even with the consistent increase in domestic consumption of the grain, the significant projected reduction in the profitability of corn in the country tends to lead to a drop in the area allocated to the crop", stated Santos, in a note.

The study was not based on field research, unlike Conab's monthly surveys, but considers a statistical model to estimate area, productivity and grain production, in addition to macroeconomic scenarios of national and international markets and commodity prices.

With a lower production of corn, mainly, Brazil's total production of grains and oilseeds was estimated at 319.5 million tons in the 2023/24 harvest, a decline of 1% compared to the record of 322.75 million tons in the last cycle .

(By Roberto Samora)

Source: Reuters