USDA Cuts Its Forecast for Brazil Soybean Production on Inconsistent Weather

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8 December 2023

The USDA turned its focus to South America in the December WASDE report, trimming its forecast for Brazil’s soybean production to reflect the erratic rainfall and heat stress afflicting many parts of the country.

In an unusual move this early in the season, the USDA lowered its forecast for the Brazil soybean harvest to 161 million tonnes, down 1.2% from last month’s projection, but still ahead of last year’s revised record output of 160 million tonnes. Brazil is the world’s largest producer and exporter of soybeans and competes with the US to satisfy China’s soybean import demand, which has skyrocketed to record levels over the last two decades, as seen in this Gro display.

Brazil corn production estimates were left unchanged, despite the heavy rainfall in the country’s south that has damaged the first corn crop. Brazil’s much larger second corn crop, or safrinha, will face its own yield risks when planting begins in early 2024 because of delays to the current soybean crop.

Excess rainfall in southern Brazil contrasts with dry conditions in the center of the country, as Gro wrote about here. In Mato Grosso, the largest soybean growing state, precipitation in October and November was 53% below the 30-year average, according to Gro’s Climate Risk Navigator for Agriculture. Drought readings for the state are close to “severe” levels as measured by the Gro Drought Index and are the second highest in 20 years, as seen in this Gro Navigator display, weighted for Mato Grosso’s soybean-growing areas.

The USDA left unchanged its forecasts for Argentina’s corn and soybean production, which are projected to jump by 62% and 92%, respectively, from last year’s weak output — a result of La Niña-induced drought. This year, beneficial rains since mid-October — which may have been helped by El Niño — have lowered Gro Drought Index readings and boosted soil moisture levels for both Argentina’s soybeans and corn, as seen in this Gro Navigator display.

Argentina is the No.1 exporter of soybean meal and oil. It is also the third-largest corn exporter, after Brazil and the US.

Gro’s machine-learning Yield Forecast Models for Brazil and Argentina, included in our South America Crop Production Monitors for corn and soybeans, will begin generating daily forecasts in mid-December when the crops become established.

While the USDA left unchanged its estimate for US corn production, the agency reduced US corn ending stocks by 1.2%, as exports were raised by 25 million bushels. The US currently is the lowest cost shipper as seen in this Gro display of global export prices. US soybean ending stocks were left unchanged.

The USDA also cut US wheat ending stocks by 3.7% as export demand picked up with recent soft red winter wheat sales to China. Despite the uptick, total US wheat exports are still projected to be the lowest since 1971.

Meanwhile, the USDA slightly raised its estimates for Canadian wheat production, up 3.1% to 31.95 million tonnes, and for Australian wheat production, up 4.1% to 25.5 million tonnes. But the agency cut by nearly 11% its forecast for Brazil wheat output due to excessive rains in the south.

China is expected to be the world’s largest wheat importer this year (2023/24), with the country’s wheat import estimate raised another 4.2% to 12.5 million tonnes. China’s own wheat crop suffered from untimely rains during harvest season, as Gro highlighted here. China’s soybean import estimate was also raised by 2% to a record 102 million tonnes on strong shipments from Brazil and the US.

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Source link : https://www.gro-intelligence.com/insights/usda-cuts-its-forecast-for-brazil-soybean-production-on-inconsistent-weather Author : Publish date : 2023-12-08 15:16:01 Copyright for syndicated content belongs to the linked Source .