South America Calling

Brazilian farmers will increase soybean acres for the eighth consecutive year in the upcoming 2013-14 season, this time by 6%, AgRural, a local farm consultancy, said Monday.

Area will rise to 72.9 million acres when planting starts in September despite the recent decline in soybean quotes as a strengthening of the U.S. dollar has offset the losses in local terms. As a result, planting of the oilseed promises positive returns, even in areas where logistical costs are highest, said the Curitiba-based consultancy.

Based on yield data from the last ten years, production will jump 9% to 89.1 million metric tons next season.

Mato Grosso, Brazil's largest soybean state, will see a 5.2% increase in area to 20.3 million acres. Growth will be most dramatic in the east of the state, principally due to the conversion of degraded pasture. Elsewhere, soybeans will move onto land planted with cotton last year.

In southern Brazil, soybeans will replace corn, which is currently quoted at prices a third lower than the oilseed.

Area in Parana, the No. 2 soy state, will rise 5.0% to 12.3 million acres, while area in Rio Grande do Sul, the No. 3 state, will grow 7.0% to 12.2 million acres.

Summer corn area will fall 13.3% to 14.8 million acres, AgRural predicts.

Soybean planting will expand quickest in Mapito, a frontier Cerrado region in Brazil's northeast. Growth will occur mainly on new areas, but also due to switching from corn.

Maranhao, Mapito's biggest planting state, will see soybean area grow 10.1% to 1.59 million acres, while neighboring Tocantins state will see planting jump 15% to 1.56 million acres.

Brazil is vying with the U.S. to be the world's No. 1 soybean producer.

Alastair Stewart can be reached at Alastair.stewart@telventdtn.com

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