The country is forecast to produce 112.5 tonnes, a decline of 1.3% from last year’s record output, the report said.

Planted area in 2017-18 is pegged at 35 million hectares, a 3% increase from the previous growing season. Despite the higher planted area, the lower forecast production is a result of lower yields compared to a year ago as a result of weather issues in the south. National yields are predicted to reach 3.21 tonnes per hectare, the report said.

The report also said Brazil will sustain its position as the largest soybean exporter in the world. Soybean exports for 2017-18 are forecast at 65 million tonnes, about 5% lower compared to 2016-17.

“The reduction is based on lower exportable supplies and higher domestic consumption,” the GAIN report said. “However, due to the large ending stocks and big expected crop, Brazil will continue to ship large quantities and heavily compete with U.S. soybeans, particularly in China.”

It noted that port expansions in the northern part of the country will continue to support export growth.

“Since 2014, infrastructure developments by the private sector have dramatically increased the capacity to export out of the north,” the report said. “About 20% of all exports is forecast to leave out of the northern ports in Santarem, Barcarena, Manaus, and Sao Luis. In addition, future projects are already announced as companies look for alternative routes.

“Cargill just submitted environmental studies with the Department of Environment and Sustainability of the northern Brazilian state of Para, for construction of a new grain port terminal in the city of Abaetetuba. It is expected to be ready by 2022, with a capacity to export up to 6 million tonnes of grain annually.”