CORN / SOY MARKET | BRAZIL · corn / soy market | brazil usda´s 94th annual agricultural outlook...

CORN / SOYMARKET | BRAZILUSDA´S 94TH ANNUAL AGRICULTURAL OUTLOOK FORUM

ANDRÉ PESSOAFEBRUARY, 2018

Brazil | Scale and Double Crop Advantages

This slide was shown in the USDA Outlook Forum 2002 as an innovation.

Corn 2nd Crop | Agronomics and Optimization Benefits

• Crop rotation between corn and beans (C4 – C3)

• Soil protection in a “no‐tillage system”

• Fertilization of the fields as a single system

• Better control of nematodes, diseases and pests

• Machinery and Labor optimization in the farm, diluting fixed costs

• Better balanced cash flow of the farming business during the year

Corn – 1st Crop (summer)

Corn/Brazil | Production

Source: IBGE, Elaborated by: Agroconsult

Corn – 2nd Crop (fall/winter)

94% of total

production

85% of total

production

(million acres)Corn/Brazil | Planted Area

Source: CONAB, Forecast: Agroconsult

Corn 2nd crop/soybean area: 18% 19% 25% 33% 35%

22,4

23,9

23,8

16,8

11,7

5,7 8,8 13,1

22,9

30,228

,1 32,7 36

,9 39,6 42,0

Corn ‐ 2ndcrop (fall)

Corn ‐ 1stcrop(summer)

Planting

Soybean / Brazil | “Ace in the hole”

Source: IMEA, Elaborated by: Agroconsult

Harvesting

The period when soybean planting is notallowed (soybean rust prevention) ends on Sep-15

Ideal calendar to planting Corn 2nd crop% of soybean harvest: 10 years ago: 35% Last 2 crops: 60%

0%

5%

10%

15%

20%

25%

30%

15 30 15 27 15 30 10 17 30

jan feb mar apr

10 years ago

Last 2 crops

0%

20%

40%

60%

80%

100%

10 yearsago

Last 2crops

Last 20 years: Focus on early cyclebreeding improvement. Reducing

the total cycle from 120‐130 days to95‐100 days.

Source: CONAB, Elaborated by: Agroconsult

5170

3248

40 4451 52

5 26

12 38

Evolution of Corn 2nd crop overSoybean area (%)

Mato Grosso

Paraná

Mato Grosso do SulSão Paulo

Minas Gerais

Goiás

Corn 2nd Crop/Brazil | Penetration by state 07/08 to 17/18

0

20

40

60

80

100

120

140

160

180

Trend line

Corn 1st crop ‐Center/South

Corn 2nd crop

(bushel/acre)Corn/Brazil | Yield

Source: Agroconsult,

c.a.g.r.: Corn 2nd crop: 3.6 % a.a.Corn 1st crop: 4.8 % a.a.

c.a.g.r.: Corn 2nd crop: 3.7 % a.a.Corn 1st crop: 5.2 % a.a.

Source: IBGE, CONAB and Agroconsult * Food, Industrial Use, Seeds and Others

Corn/Brazil | Domestic Consumption(million t.)

135

42

5259

2002 2007 2012 2017

Others*

Ethanol

Cattle + Milk

Swine

Poultry +Eggs

c.a.g.r Last 10 yearsSwine 3%Poultry + Eggs 3%Cattle + Milk 7%Ethanol 87%Others 2%Total 3%

DomesticMarket Share: 99% 82% 71% 59%

Ethanol | Estimated Corn-based Output in Brazil

Source: UNICA. Forecast: Agroconsult

Corn‐based Ethanol Output (Bi liters)

Corn crushed for Ethanol(MMT)

2017/186 Working Facility (1 Full + 3 Flex)1.3 mmt of corn0.55 million liters of ethanol

Next years+ 13 Facilities (5 Full + 8 Flex)8.2 mmt of corn3.2 billion liters of ethanol

0,1 0,1 0,2 0,5 0,6

3,2

0,0

0,5

1,0

1,5

2,0

2,5

3,0

3,5

Billion

of L

iters

0,2 0,4 0,6 1,3 1,5

8,2

0123456789

10

MMT

South and Southeast:

North, Northeast andCenter‐West :

ITAQUI

SANTOS

SÃO FRANCISCO DO SUL

VITÓRIA

SANTARÉM

ITACOATIARA

ARATU

RIO GRANDE

PARANAGUÁ

Production area Exports Ports2007

Source: Agroconsult, SECEX

Corn/Brazil | Production and Exports

36 mmt62%

24 mmt38%

5.9 mmt92%

0.4 mmt8%



ITAQUI

SANTOS

SÃO FRANCISCO DO SUL

VITÓRIA

SANTARÉMITACOATIARA

ARATU

RIO GRANDE

PARANAGUÁ

2017

Source: Agroconsult, SECEX

Corn/Brazil | Production and Exports

39.5 mmt40%

59.1 mmt60%

20.6 mmt71%

8.6 mmt29%

Production area Exports Ports





VILA do CONDE

MIRITITUBA

New Port Falicities

(millions t.)Soy+Corn/Brazil | Northern Arc Export

Source: CONAB, Forecast: Agroconsult. Calendar: Jan/Dec

4 4 2 5 5 6 6 7 7 9 13 1118

36

1 1 2 3 26

4

9

21

4 4 2 5 6 7 7 8 10 1118

15

27

58

Milho

Soja

Corn

Soy

16% 17% 22% 27% 35% Share of total Exports

Corn/Brazil | Production and Logistics Costs

2,51,7 1,7 1,7 1,7

1,9

1,9 1,4 1,6 1,1

4,4

3,63,1 3,3

2,8

10 yearsago

SouthPorts

NorthPorts

SouthPorts

NorthPorts

Last Crop Next 10 years

Logistic Costs

Production +OperacionalCost

Source: Agroconsult

Production in Sorriso/MT(USD/bu)

2016/201707/08 2027/2028

4,1 3,8

3,5 3,63,9

3,5

3,63,8

3,3

2,0

3,0

4,0

5,0

6,0

7,0

(USD

/Bu)

IOWA

BRA‐ MT*

Corn | Break-even(USD/bu) – FOB Cost• Land rent included in IOWA cost • Land rent not included in Mato Grosso; it´s on summer soy cost

Source: USDA, AMS, Agroconsult.

2nd Crop

Corn | Break-even(USD/bu) – FOB Cost

Source: USDA, AMS, Agroconsult.

2nd Crop

4,1 3,83,5 3,6

2,0 2,12,6 2,7 2,6

1,0

2,0

3,0

4,0

5,0

6,0

7,0

(USD

/Bu)

IOWA

BRA‐ PR*

• Land rent included in IOWA cost • Land rent not included in Paraná; it´s on summer soy cost

Source: USDA Forecast: Agroconsult. Calendar: OCT/SEP.

Corn | Exports(million t.)Calendar: October/September

20

30 33

6050

70

0

10

20

30

40

50

60

70

80

Most probable

Scenario B

Scenario C

50 Scenario BWorld demand based in meat

imports

World demand based in grain

imports 70 Scenario C

SOYBEAN MARKET 17/18

Soybeans market


❶We are heading to a record crop

(millions t.)Soybean/Brazil | Production


81.5 86.197.2 96.3

114.6 117.5

‐1% 19% 3%

12/13 13/14 14/15 15/16 16/17 17/18

Soybean/Brazil | Crop Condition

Source: Agroconsult

Better than the previous crop

Equivalent to the previous crop

Worse than the previous crop

Area(%)561034

The Rally da Safra Roadmap follows the soybean and corn farming calendar.

WHERE AND WHEN THE TRIP TAKES PLACE

9 teams will focus on soybean

3 teams will focus on corn

Campo Grande

Cascavel

MaringáGuaíra

DouradosMaracaju

RondonópolisPrimavera do Leste

MineirosJataí

Rio Verde

Sinop

Sorriso

Nova Mutum

Campo Novodo Parecis

Cuiabá

Lucas do Rio Verde

Catalão

UnaíGoiânia

Brasília

Campinas

Itapeva

Ponta GrossaPato Branco

Chapecó

Santa RosaCruz Alta Passo Fundo

Palmeira das Missões

Palmas

LEM

Porto Nacional

Gurupi

Uberlândia

Querência

Gaúcha do NorteBarra do Garças

PontaPorã

Posto do Rosário

Bom Je

UruçuíBalsas

MATO GROSSO

SAMPLESSoybeans 1163Corn 407TOTAL 1570

Soybean/Brazil | Yields

Source: Conab. Forecast: Agroconsult

52.6

49.1

54.658.1

49.5

54.8

53.3

56.5

54.0

63.1 62.6

(bu/acre)

CAGR(yoy)1,8%

Soybeans market



❷ Argentina already has irreversible losses

Soybean/Argentina | Yields and Production

Production (millions t.)

4940

49 5361 57 58

49

‐7% 2% ‐15%15%

Source: USDA, Forecast: Agroconsult

Yields (bags/ha)

45

3842

46

5348

52

46

Soybean/ARG and BRA | 2017/18 Production

Source: USD and CONAB. Forecast: Agroconsult

(millions t.)

111.3 117.5

5.2 6.2

54.2 49.0

165.5 166.5

ARG+BRAInitial Prod.

ARG BRA ARG+BRACurrent Prod.

‐ +

BRA

ARG

Soybean Meal/ARG and BRA | 2017/18 Production

Source: USD and CONAB. Forecast: Agroconsult

(millions t.)

87.0 84.8

2.5 0.4

ARG+BRAInitial Prod.

ARG BRA ARG+BRACurrent Prod.

‐ +

Soybeans market




❸ Arg. Crushing volumes reduction might increasecrushing in USA. But imports from Paraguay canbalance the meal production in Argentina

Soybeans market


❶Brazil is heading to a record crop



❹ Brazilian exports will be record again

(millions t.)Soybean/Brazil | Export

Source: CONAB, Forecast: Agroconsult. Calendar: OCT/SEP

41.7 45.7 51.2 53.162.8

71.3

102.04% 18% 13%

12/13 13/14 14/15 15/16 16/17 17/18 2027/28

(millions t.)Soy+Corn/Brazil | Exports vs. Theoretical Capacity

Source: Lineup Cargonave. Ports: Santos, Paranaguá, Rio Grande, São Francisco, Imbituba, Vitória, Itacoatiara, Itaqui, Vila do Conde, Santarém, Aratu.

0

2

4

6

8

10

12

14

Exports in 2017: 98 mmtMaximum already observed month by month: 113 mmt

(millions t.)Soybean/Brazil | Northern Arc Export


7.2 8.612.8 11.2

18.0

36.2

2013 2014 2015 2016 2017 2027

Soybeans market


❶Brazil is heading to a record crop


❹ Brazilian exports will be record high

❺ Pricing soybeans is BRL rational


Exc. Rate(BRL/USD) 8,0 8,5 9,0 9,5 10,0 10,5 11,0 11,5 12,0

2,40 26 29 31 34 37 39 42 44 472,60 30 33 35 38 41 44 47 50 532,80 34 37 40 43 46 49 52 55 583,00 37 41 44 47 51 54 57 60 643,20 41 45 48 52 55 59 62 66 693,40 45 49 52 56 60 64 67 71 753,60 49 53 57 61 65 69 73 76 803,80 52 57 61 65 69 73 78 82 864,00 56 61 65 70 74 78 83 87 92

Chicago CBOT (USD/bu)

Soybean/Mato Grosso | Marketing (BRL/bag of 60kg)

Source: Agroconsult Freight: 260 BRL/ton. Premium: 60 US¢/bu. Basis: 4 BRL/bag of 60kg. Source of marketing: IMEA.

2% 3% 4% 5%2%

5%

13%8%

3% 6%

53.5 53.0

54.9

52.854.4

56.457.6 57.8

55.7 56.3

0%

5%

10%

15%

20%

25%

48.0

50.0

52.0

54.0

56.0

58.0

60.0

mai‐17 jun‐17 jul‐17 ago‐17 set‐17 out‐17 nov‐17 dez‐17 jan‐18 fev‐18

Marketin

g (%

)

Pricein Sorriso‐MT (BRL/bag

of60

kg)

Total UntilFeb/1851%

agroconsult.com.br+55 48 3209-1650

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CORN / SOY MARKET | BRAZIL · corn / soy market | brazil usda´s 94th annual agricultural outlook...

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