Brazil Corn-to-Soy Switch Foreshadows Record Glut: Commodities
The crash in corn prices is spilling over into soybeans. As a result, Brazil will grow more of the higher-value oilseed, helping push global markets into a record glut and replacing the U.S. as the top producer.
Soybean farmers in the largest exporting nation plan to sow a second crop in a Jamaica-sized area in the off-season rather than rotate to corn, as they traditionally do, after corn lost 42 percent in a year. That’s enough to produce a record surplus of the legume used in everything from tofu to salad dressing and sold in Japanese restaurants as edamame beans.Back in 2011 we posted "How They Harvest Soybeans in Brazil" which gives some idea of the scale the Brazilians work on:
A group of farming companies including Vanguarda Agro SA (VAGR3) are planning to make the switch for the May-to-June harvest for the first time rather than lose more money in the off-season on corn. Vanguarda’s third-quarter loss was its biggest in a year.
“Growers should continue to face a hard time to make any profit from their corn crops in 2014,” Vanguarda Chief Executive Officer Arlindo Moura said by phone from Sao Paulo.
Farmers in Mato Grosso state who produce about a 10th of the world’s soybeans will plant them again on about 1 million hectares (2.5 million acres) of 3 million previously sowed with corn for the May-to-June harvest, Carlos Favaro, head of growers group Aprosoja, said in an interview.
That would add as much as 3 million metric tons -- more than Japan’s annual imports -- to the record 88 million the U.S. Department of Agriculture expects for the full growing season, according to Favaro.
Global Surplus
The shift should take pressure from corn prices and add it to soybeans. Soybeans for January delivery rose 0.7 percent to close at $13.295 a bushel at 1:15 p.m. on the Chicago Board of Trade. Corn gained 1.2 percent to $4.365 a bushel.
The extra output in Mato Grosso alone would be enough to raise a global surplus of the oilseed above the record 71.8 million tons from the 70.2 million-ton currently estimated by the USDA. USDA and Brazilian government forecasts so far haven’t taken into account any soybean planting for Mato Grosso’s off-season....MORE
Northern Brazil:
Western Brazil:
More Mato Grosso:
Here the corn planters are following immediately behind the combines.
This is no till farming on steroids.
It appears the sleeping giant has awakened.
Brazil is now second only to the United States in soybean production.
They are third in corn production but distantly trailing the U.S. and China,
