The latest study from the Brazilian Agricultural Confederation (CNA) shows tight margins for Brazilian soybean and corn farmers during the month of May.

Despite a record soybean crop this year, totaling 68 million metric tons (mmt), compared to last year's 57 mmt, only four of the five regions researched by the CNA showed positive margins for soybeans last month.

In Sorriso, Mato Grosso, the cost of production for soybeans was estimated at $7.51 per bushel this season, while prices averaged $7.23/bu leading, leading to an average loss of $0.28/bu for those who sold beans during May.

In Campo Mourao, Parana state, the average price last month was $8.79/bu, while the cost of production was estimated at $7.10/bu, leading to an average profit of $1.69/bu.

Meanwhile, for corn, the situation was even worse as only one out of the five regions studied showed positive margins last month.

In Mato Grosso, the average cost of production was $4.30/bu, while the price of corn in Primavera do Leste was just $2.89/bu, leaving farmers with a loss of $1.41/bu.

In Campo Mourao, Parana, the average price for corn last month was $4.19/bu, while costs were estimated at $4.59/bu, leaving farmers with a loss of $0.40/bu.

The only region to show a profit for corn last month was Rio Grande do Sul, with average prices in Passo Fundo at $5.02/bu, while the cost of production was $4.70/bu, leaving a slim profit of $0.32/bu.

A strong local currency, currently quoted at R$1.81/dlr compared to R$2.20/dlr this time last year, and high transport and input costs, have shaved farm profits this season and will likely limit any expansion in area for the upcoming season.