After corn lost 42% in a year, and soybeans are bringing approximately three times the price per tom as corn, farming companies in Brazil including Vanguarda Agro SA are planning to sow a second crop of soybeans for the first time to avoid losing more money in the off season on corn. This switch from corn to soy in the world’s largest soybean exporting country will likely see global markets advancing into a record glut. In the Brazilian state of Mato Grosso which produces 10% of the world’s soybeans, of the 3 million hectares that had previously been sown in corn in the off season, 1 million hectares will be replanted in soybeans for the May- June 2014 harvest, as currently, domestic corn prices in the state are below the cost of production with no signs of improvement. This would add up to 3 million tons to the 88 million tons of soybeans that the U.S. Department of Agriculture (USDA) forecasts from the full growing season and the extra output would be enough to raise the global surplus above the record of 71.8 million tons. Growers in Mato Grosso are still holding back 35% of their corn from last year – up from 10% a year earlier, as they wait for prices to improve. According to the USDA Brazil is expected to boost soybean exports to 44 million tons – or 40% of global shipments in the 2013/14 crop year – up from 41.9 million tons a year earlier. However, some experts believe that because of increased technical issues and pest infestations involved with growing a second soybean crop, sowing may not be as extensive as some anticipate.
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