Grains –
IMEA, the state ag agency of Mato Grosso in Brazil, released their first projection for soybean yields yesterday afternoon. They estimated yields at a record 54 bags/hectare, which would be up from their estimate of 49.8 bags/ha last year. They estimate total production at 30.47 mmt, up from 27.8 mmt in their projection last year. Looking at their figures compared to Conab, who will be out with their own updated projections later this week, the IMEA yield would equal roughly 3,240 kg/ha compared to Conab’s 3,131 kg/ha. Using Conab’s area estimate, a IMEA yield level would increase Conab’s production estimate by roughly 1.2 mmt over the high-end estimate. Recall that up to this point in the year Conab has released a range of estimates, and for Mato Grosso they issued a range of 28.9-29.2 mmt. So if we were to just assume IMEA is correct and take all other states’ ranges as they were in Conab’s last monthly report, the range of production potential in Brazil has shifted higher to roughly 102.8-104.7 mmt. Note that WASDE’s latest projection was 102.0 mmt, coming in under this “updated” production range. I suppose it is possible that WASDE might tinker with their figure later this month but they seem to be pretty conservative with their production changes in South America so I wouldn’t be surprised to see them wait another month.
IMEA also updated with a corn production estimate yesterday, though this is far less certain as we’re not even close to planting safrinha yet. They are currently projecting total corn area to increase roughly 4% YOY. They have yields up roughly 30% YOY following last year’s drought-reduced safrinha production. They are forecasting production of 25.0 mmt vs 18.9 mmt last year. It is worth noting that this is significantly higher than the high end of the Conab production range given last month, but one must also realize that Conab is not yet making an assumption on area changes for safrinha production and until they do their production estimate will look “light” by comparison. Conab typically updates their safrinha area projections in their February report, though it could come sooner.
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