South American farmers are expected to boost soybean plantings this fall and reload the world pipeline in 2014.
Giovani Ferreira, agribusiness manager for Gazeta Do Povo (a Brazilian publication), this week estimated Brazilian farmers this fall could plant 3.25 million more acres of beans and reduce corn plantings by 2 million acres due to economics that currently favor soy production.
Overall, he projected soybean production will total 90 million tons (3.3 billion bushels) in Brazil, 55 million tons (2 billion bushels) in Argentina and 10 million tons (370 million bushels) in Paraguay.
“Our soybean production likely will grow and corn acres will decrease because of prices,” Ferreira told FarmWeek.
Ferreira and his business associate, Jose Rocher, last week met with AgriVisor analysts in Bloomington during a crop expedition tour through the U.S.
Dale Durchholz, AgriVisor senior market analyst, projected South American soybean production could reach 5.7 billion bushels.
If realized, South American bean production would nearly double that of the U.S. American farmers this fall are expected to haul in about 3.1 billion to 3.2 billion bushels of beans.
“South America controls the destiny of the (soybean) market,” Durchholz said. “There’s potential, with good weather, for a 5.7 billion bushel soybean crop in South America.”
Soybean prices could decline from the $13-range this month to $12 per bushel by the end of the calendar year. If South America harvests a bin-buster crop, bean prices by next year could slip to $10 per bushel, according to the analyst.
The planting season in South America is off to a less than desirable start, though, as rains in Brazil delayed planting. Soy planting last week in Brazil was about 5 to 8 percent complete compared to 12 percent at the same time last year, Ferreira noted.
“If there are weather scares in South America, (the bean market) could gain more strength,” Durchholz said.
South American farmers still have infrastructure issues that reduce their competitiveness with their U.S. counterparts, though.
Total crop storage in Brazil totals about 60 to 70 percent of production. Durchholz estimated storage capacity in the U.S. is around 90 percent.
The Brazilian government is attempting to catch up. Last year it started a program to expand storage capacity and it currently is in the midst of road and rail projects that are expected to be completed in the next 5 to 10 years.