Soybean Harvest Is Just Now Beginning in Brazil. Here’s What the Crop Looks Like

Soybean prices continued to slide this week on news that a wetter weather pattern is blanketing Brazil. The rains are giving the crops a much-needed drink after battling severe drought conditions at the end of 2023. 

“We shifted to a wetter pattern in Brazil. That's all there is to it. And that's why the markets are down,” says Joe Vaclavik with Standard Grain. “When you get into the nitty gritty details, is this going to be too much rain? Was the early drought too much in some areas? I think that will all be sorted out later. But for the moment, the knee-jerk reaction, if you're a trader, if you’re a fund manager, you're looking at the weather maps that are as bearish or as wet as they've been throughout this growing cycle.”

Vaclavik says there’s also not much interest in buying soybeans in such a bearish environment, and that extends beyond just soybeans. 

Dan Basse, with AgResource Company, just returned from a trip to Brazil. He says the crop production outlook in Brazil took a severe hit from the drought. 

“It's really up in northern Mato Grosso, in some of the harvest areas. We're seeing yields coming in anywhere between 20% and 60% below last year,” says Basse. “So, my office at AgResource Company in Brazil, has cut the crop estimate to about 150 million metric tons. That’s down 13 million metric tons from USDA but, maybe more importantly, there may be additional cuts coming.”

Basse points out that as yield data comes in, it’s showing the drought that was so persistent from September through December in Brazil was extremely disruptive to soybean production there. 

“That soybean crop is just not coming along as we would expect. I would point out that Brazil plants a 99- to 104-day soybean down there that doesn't have drought tolerance. It needs good days, and it just didn't have many of those, at least over the last few months,” says Basse. 

Eric Snodgrass, science fellow and principal atmospheric scientist with Nutrien Ag Solutions, says the wet weather is a sudden switch from the drought that plagued a vital soybean and production growing region at the end of 2023.  

Snodgrass says forecasts point to as much as 8 inches to 10 inches of rain in a span of two weeks. While the rain is needed, it could actually do more harm than good.  
 
“To be honest with you, I think this is a worst-case scenario, compared to if it had just stayed drier,” Snodgrass says. “What I mean by that is you bring in all that rain, it's going to impact some early harvests. But what happens if all of that moisture begins to get recycled? In other words, it sticks around and that makes things wetter for a while. Now, all of a sudden, you start pushing back the harvest time period. And that's going to just keep pushing that crop calendar such that the safrinha corn crop goes in late.”