Brazil to be Top Soy Producer in 2019-20: Report

Brazil will top the U.S. as the world’s largest soybean producer in 2019-20, according to a new USDA report.

Penned by the USDA’s attaché in Brazil and released Dec. 27, the report pegs the Brazilian crop at 123.5 million tonnes, up from 117 million a year earlier and well above the 2019 U.S. crop of 96.62 million.

Even as soybean production in both countries increased dramatically over the last decade, the U.S. typically continued to lead the world in production, with Brazil the No. 2 producer. The one previous exception was in 2017-18, when a record-large Brazilian crop of 122 million topped American output by about 2 million tonnes.

U.S. soybean production this year was hurt by a reduction in planted and harvested area, along with major weather problems that featured overly wet weather at both planting and harvest. Meanwhile, the bulk of this year’s Brazilian crop is still in its relatively early stages of development, but weather so far has been mostly favourable. The majority of the Brazilian crop is harvested in March, meaning the 2019-20 crop still has a long way to go to the bin.

With the larger expected crop, the report estimated the 2019-20 Brazil soybean crush at approximately 44 million tonnes, producing 34.1 million tonnes of soymeal and 8.6 million tonnes of soyoil. In 2018-19, the Brazilian crush amounted to 42.5 million tonnes, with soymeal and soyoil production pegged at 32.9 million and 8.1 million tonnes, respectively.

For soymeal, rising domestic consumption is being driven by Brazil’s livestock and poultry industries, the attaché wrote, with soyoil use expected to be boosted by increased biodiesel output.

The report noted some uncertainty around 2019-20 Brazil soybean exports, particularly as the U.S. and China are scheduled to sign a new phase one trade deal on Jan. 15 that is expected to result in more Chinese buying of American agricultural products – potentially meaning less business for Brazil. Nevertheless, the report estimated Brazilian exports at 75 million tonnes, up 2 million from a year earlier, citing a smaller U.S. crop, rising export taxes in Argentina and a lower domestic currency.

Source: DePutter Publishing Ltd.

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