Commodities Shuttle: Government revises crop downwards, but market estimates even greater drop

The Minister of Agriculture, Tereza Cristina, who is expected to leave the government in March, will not have fulfilled her dream of leaving the Ministry with the country producing close to 300 million tons of grain.

Brazil has been going through one of its worst droughts in the last two years.

As a result, the grain production potential, which under ideal conditions could reach 300 million tons, will once again be very far away.

Conab (National Supply Company), which had initially estimated the harvest at 291.1 million tons, revised the data this Tuesday (11) to 284.4 million.

Conab itself admits that not all of the current climate effect on crops is included in the figures released.

The market, however, has already made its predictions, and the numbers are much lower than those of the government agency, according to Vlamir Brandalizze, from Brandalizze Consulting.

In his assessment, by computing the market numbers for the breakdown of soybeans for the three states of the South and Mato Grosso do Sul, the volume could reach a loss of 11.5 million tons, in relation to what was projected. In other words, the soybean crop could be close to 131 million.

AgRural, from Curitiba, also redid its calculations and believes that this year’s soybean production will be lower than last year’s, which reached a record 137.3 million tons.

For analysts at AgRural, the drought and extreme heat of recent weeks should cause a drop of at least 11.3 million tons in the current crop, compared to the agency’s previous production estimate. For the current effects alone, production would be reduced to 133.4 million tons.

The drought also affected the corn crop. For Rafael Fogaça, manager of Crop Monitoring at Conab, corn was more sensitive to drought, due to the water demand that cereal crops have this time of year. In his assessment, there is no possibility of recovering losses, even if it rains.

The corn crop in the South will be 24.7 million tons, 5 million less than the initial estimate, according to Conab. Brandalizze believes, however, that these numbers are out of date. The summer crop, which is important in the south of the country, should be only 20 million tons.

The second crop, the winter crop, if there are no extreme effects, will yield 86 million tons, according to Fogaça. In government calculations, the total Brazilian crop would be 112.9 million tons this year, but the market already sees it close to 108 million.

If the market is right in its assessments, the national grain crop will have a reasonable loss this year, falling below 175 million tons.

Sergio De Zen, director of Agricultural Policy and Information at Conab, says that there is a moment of uncertainty in the South, especially in Rio Grande do Sul. the soybean harvest.

The advance of machines in the field allows the planting of the second corn crop to be in better conditions than they were in 2021.

Despite the lower production at the beginning of the harvest, there is tranquility for supply in the months of May and June, the most critical, according to the director.

Conab estimates that cotton lint production should rise to 2.7 million tons, up 15% over the previous year. The rice harvest will yield 11.4 million tons, 3.2% less, while the bean harvest will reach 3.1 million, an increase of 7.2%.