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August 21, 2018

Could Brazil Plant more Soy in 2018/19, but Produce a smaller Crop?

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

A few months ago, it looked like Brazilian farmers would be in the "driver's seat" when it came to producing soybeans given the trade issues in the U.S. and the financial issues in Argentina. But with the 2018/19 planting season quickly approaching, the picture does not look quite as rosy as it did before. As Brazilian farmers prepare for planting, there are a number is issues nagging at farmers including: higher cost of production, higher freight rates, potentially lower fertilizer application rates, a potential ban on Roundup herbicide, and the potential for adverse weather.

Brazil has recorded two record soybean yields in a row and all the above mentioned issues could break the string of record yields and potentially trim soybean yields in 2018/19. Therefore, it is possible that the soybean acreage might increase in 2018/19, but the total soybean production may not increase especially if there is adverse weather during the growing season.

I still think the Brazilian soybean acreage will increase 3-4% in 2018/19, but there is a distinct possibility that the soybean production in 2018/19 may not increase a corresponding 3-4%. Weather is always the primary concern when it comes to the yield potential, but if farmers have trouble planting no-till soybeans due to a ban on Roundup and they apply less fertilizers, and if the weed pressures are greater this coming growing season, it is possible that the Brazilian soybean production might actually decline in 2018/19.