Brazil’s soybean output, and exports, will set records by an even bigger margin than had been expected thanks to strong farmer profitability prospects, and a decent start to the sowing season.

Conab, Brazil’s official crop bureau, lifted by 1.19m tonnes to 153.5m tonnes its forecast for Brazilian soybean production in 2022-23 – by far the biggest crop ever produced.

The revision reflected an improved sowings estimate – upgraded by 350,000 hectares to 42.89m hectares – and which is now expected to growth by 1.40m hectares year on year, encouraged by decent soil moisture levels.

“In Mato Grosso, the main soybean producing state, planting work is approaching the end and the crops are showing good development, despite the irregularity of the rains,” Conab said.

“In Mato Grosso do Sul, this is considered one of the crops with the best development in recent years.”

Soybeans vs corn

While the area expansion has come largely from ploughing up pasture, the bureau also noted the appeal of soybeans to growers thanks to its relatively low production costs, with farmers “opting for the oilseed to the detriment of other crops due to better profitability”.

Soybeans – unlike corn, a notoriously fertilizer-hungry crop – fix the key nutrient of nitrogen from the atmosphere.

Indeed, Conab downgraded by 72,000 hectares to 4.41m hectares its forecast for Brazil’s 2022-23 sowings of first crop corn, which competes with soybeans for land in states such as Minas Gerais and Rio Grande do Sul.

First crop corn plantings are now expected to fall by 140,000 hectares year on year, Conab said, noting the “increase in production costs and the high pressure of leafhopper” insect pests, which many farmers hope to control through lowering corn plantings.

The bureau cut its forecast for Brazil’s overall corn output in 2022-23 by 544,000 tonnes to 126.4m tonnes, although this would still represent a record high.

‘High international prices’

The enhanced soybean production forecast was reflected in an upgrade of 575,000 tonnes to 96.45m tonnes in the estimate for Brazil’s 2023 exports, which would also a record high.

The export forecast for calendar 2022 was lifted too, by 956,000 tonnes to 79.22m tonnes, as traders rushed to cash in on “high international prices”.

Estimates for exports of soymeal and soyoil, the two main soybean processing products, were also upgraded – by 899,000 tonnes to 19.95m tonnes for the feed ingredient, and by 432,000 tonnes to 2.53m tonnes for the vegetable oil.

“High international prices, positive crushing margins, a reduced percentage of biodiesel in diesel, heated international demand and crop failure in Argentina were the main reasons for the high exports of these products,” Conab said.

Argentina is the top exporter of soymeal and of soyoil, which is used largely in making biodiesel. Brazil cut its biodiesel blending mandate in the face of tight soyoil supplies.