Report Highlights:

Post maintained its 2015/16 production forecast to 98.5 million metric tons (mmt), a record. Area planted for soybeans in Brazil is estimated at 33 million hectares. Post kept its export forecast at 55 mmt for the 2015/16 marketing year (MY).

Oilseed, Soybean (Local)

2013/2014

2014/2015

2015/2016

Market Begin Year

Feb 2014

Feb 2015

Feb 2016

Brazil

USDA Official

New Post

USDA Official

New Post

USDA Official

New Post

Area Planted

30100

30100

32100

32100

33300

33000

Area Harvested

30100

30100

32100

32100

33300

33000

Beginning Stocks

1269

1269

1527

1527

972

2492

Production

86700

86700

96200

96200

100000

98500

MY Imports

579

579

295

265

300

200

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

88548

88548

98022

97992

101272

101192

MY Exports

45747

45747

54000

52850

56650

55000

MY Exp. to EU

6000

6000

6000

6000

6000

6500

Crush

38274

38274

40000

39550

40000

40000

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

3000

3000

3050

3100

3100

3150

Total Dom. Cons.

41274

41274

43050

42650

43100

43150

Ending Stocks

1527

1527

972

2492

1522

3042

Total Distribution

88548

88548

98022

97992

101272

101192

(1000 HA) ,(1000 MT)

Soybean Production Forecast Maintained to 98.5 Million Metric Tons (MMT)

Post maintained its 2015/16 production forecast to 98.5 mmt due to a larger planted area compared to last year and yields based on trend. Post forecasts area planted in Brazil at 33 million hectares. The planting season, which started on September 15 in most states, continues to face delays due to weather problems and lower than expected precipitation. As of November 13, various sources estimates planting progress in Brazil at over 60 percent, just below compared to last year, but much lower than the five-year average of 70 percent.

Weather concerns are keeping farmers uneasy. For example, despite good rains in late October and early November, the states of Goais and Bahia are way behind their 5-year average. In Bahia and other states in the north and northeast, concerns remain high about dryness. Planting in Bahia was 8% complete November 13, well behind from the five-year average of 27% at this stage. Other states like Mato Grosso, Paraná, and Mato Grosso do Sul, have caught up the pace compared to last year, but still behind the 5-year average.

In general, the concern in Brazil is the forecast by Brazilian meteorologist that El Niño will have a major impact in precipitation this year, especially in the north and northeast. If this is the case, it can have an impact on the expected yields in eastern Goias as well as the region known as MATOPIBA (Maranhao, Tocantins, Piaui, and western Bahia).

New Strikes Creating Headaches for Producers

As previously reported, the political and economic crisis in Brazil is increasing strikes by various sectors of the economy. For the second time this year, independent truck drivers in Brazil started a national strike on November 9th. The truck drivers blocked many of the major highways in the country and their main demand is the impeachment of President Rousseff. They were also seeking lower diesel fuel prices and minimum freight rates. These drivers feel that the Brazilian Government has not followed through on promises made at the end of the previous strike in March. The closing of roads affected food distribution mostly in southern Brazil. The poultry and pork industries have been the mostly affected. In São Paulo, fruits and vegetables were also affected in their way to CEASA (the largest wholesale market in Latin America). Post is not expecting a major impact on the export forecast for Brazil in marketing year (MY) 2015/16, but will continue to monitor the situation.

Post is also monitoring threats of a new strike by the National Association of Federal Agricultural Inspectors. This would be the second strike by this group this year. Currently, Post will continue to monitor the situation.

Export Forecast at 55 mmt for 2015/16 Marketing Year

Post kept its export forecast at 55 mmt for 2015/16 MY. The forecast was increased last month due to the fast pace of forward contracts of the crop currently being planted in Brazil. The fast commercialization of the new crop is directly linked to the sharp devaluation of the Brazilian Real, which is making Brazilian soybeans more competitive.

China will remain the main destination for Brazilian soybeans. It is expected that demand for soybeans in China will remain strong despite the economic slowdown. Chinese soybeans imports are supported by a growing domestic demand and a large domestic crushing capacity. The current lower global soybean prices and the weaker Brazilian Real are making Brazil more competitive and are encouraging Chinese importers to buy more. Since MY 2012/13, over 70 percent of Brazilian soybean exports are destined to the Chinese market.