UBS-LatAm Agribusiness Conab first estimates for 2025 26 grains crop：soybean surges, corn steady...-20250919

Conab expects strong crops - but we flag risks

Conab released its first estimates for Brazil's 25/26 grains crop. The agencyestimates a record 178mn tons soybean crop, near the midpoint of other agencies/consultants estimates. If confirmed, the volume - coupled with a likely strong cropin the US - would continue to pressure prices. However, we see risks to this numberincluding a potentially weaker area expansion and climate risks to productivity.Corn production is expected to be roughly stable at 138mn tons, supporting higherexports and demand expansion from ethanol. Cotton production is expected toslightly increase, with a +4% area expansion which underpins our view that cottonprices could remain structurally weaker.

Soybean: breaking records

Conab expects production to increase +4% YoY to a record 178mn tons in 25/26,driven by a +4% YoY area expansion in Brazil coupled with flat productivity - as arecovery in RS offsets weaker Center-West yields. This compares to USDA's 175mntons, MB Agros' 174mn tons, and Datagro's 183mn tons. We flag downside risks toConab's estimate stem from: 1) a softer area expansion given producers' squeezedmargins and financing challenges (read more); 2) potential impacts to yields inSouthern Brazil in case of a La Niña phenomenon, which typically brings drier andcooler weather to the region (read more); 3) rains in MT are delayed, with reports ofirregular and sparse volumes - although stronger rains are expected in October.