The latest update from United States Department of Agriculture (USDA) forecasted that the Brazil 2017/18 production at 107 million metric tons (mmt), a 6.1 percent reduction compared to the previous season. The drop in the production outlook is due to a return to average yields, after an almost perfect season in 2016/17. Soybean exports for Marketing Year (MY) 2017/18 are forecast at 64 mmt as a result of strong demand by China.

For the current MY 2016/17, Brazil exported 56 mmt in the first 7 months of the MY, about 19 percent higher compared to the previous season. USDA forecasts soybean exports for MY 2016/17 at 65 mmt, a record. The increase is due to the higher exportable supplies, strong demand by China, and competitive export prices.

Brazilian soybean producers have forward contracted the 2016/17 crop for exports at a much slower rate compared to the last couple of seasons waiting for better prices; however, the pace picked up in the last couple of months. In the first 7 months of the marketing year, Brazil exported 56 mmt, about 19 percent higher compared to the previous season. 

The pace of soybean exports will start to slow down as it starts to compete with corn exports, but additional port capacity in Brazilian ports should allow Brazil to continue to meet international demand.

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