Brazil’s crop may be getting even smaller. AgResource Company released their latest soybean crop production estimate for Brazil, and it shows a crop size of 119.5 MMT. The last time Brazil’s crop was under 120 MMT was during the 2018//2019 season when Brazil’s crop came in at 119.7.
“We think the crop is now under 120. Rio Grande De Sol yields have been off anywhere between 45% and 50%,” says Dan Basse of AgResource Company “If you look at the CONAB number that came out last month at 125.5 MMT, you see they kept the Rio Grande Do Sol yield near trend. If you make that adjustment, you can get down to 121. But we also saw some crop degradation in Mato Grosso Do Sul, the southern part of that state, and in Mato Grosso because of all the rain. So putting it all together a 119.5 bean crop is a big loss.”
Basse says when you factor in potential losses in Argentina and Paraguay, the loss is even steeper.
“All combined, we’re looking at 40 million metric tons of soybeans that were lost. That’s 1.4 billion bushels; we’ve never seen anything like it,” adds Basse.
USDA’s latest forecast shows drought in South America is impacting 50% of the world’s soybean supply as the estimates show the area could produce the smallest crop since 2018/19; however, the projections weren’t as low as AgResource Company just released. According to AgWeb, since December 2021, USDA has lowered soybean production in the three countries by more than 18 million tons:
- Brazil: down 7% from 2021
- Argentina: down 9% from 2021
- Paraguay: down 37% from 2021
Basse says the big downward adjustment came to the southern portion of the country where the soybean crop was later in maturity and weather has been poor.
“My team down there, which includes an agronomist who’s a Ph.D., we just run crop analysis, and we try to be sophisticated in working with our producers and then making field visits,” Basse explains. “And as we did this back in February, we came up with a 125 MMT, which got some eyebrows raised. But then, of course, CONAB dropped their number to 125.5 as the government had to get realistic in terms of farm payments to the Brazilian farmer.”
Meanwhile, AgResource thinks we’ll see 89 million acres for soybeans and 91 million acres for corn here in the U.S.
The University of Illinois’ Joana Colussi dives into how the drought in South American will impact the global soybean crop:
