2023-2024 South American Update

Official projection updates (finally!) and marketing challenges on the U.S. horizon

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

Earlier this season, we warned about the apparent optimism toward Brazil’s grain production in the 2023/24 season. Better late than never, official agencies of Brazil and the United States (CONAB and USDA, respectively) seem to have realized what we have been discussing and reviewed their projections downward. In February, CONAB revisited its forecast model for the soybean crop and reduced Brazil’s projected output to 149.4 million metric tons from 162 million in November 2023 (a 7.8% drop). USDA maintained a more conservative change, now at 156 million metric tons versus 163 million three months ago (a 4.3% reduction). Corn projections were also revisited as we anticipated. The projections fell by 4.8% (CONAB) and 3.9% (USDA), with the Brazilian entity predicting 113.7 million metric tons and the USDA forecasting 124 million in the aggregate 2023/2024 corn season.

Setting aside the (yet) considerable differences between the agencies’ estimations, my concerns were directed to the interference that inflated official projections could have caused to future prices.… Continue reading

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What is Brazil’s soybean and corn production size? 

By Daniele Siqueira, Head of Market Intelligence with Brazilian consultancy AgRural 

In a normal year, I would answer the question above by saying it is still early to tell how much corn and soybeans Brazil will be able to harvest in its 2023/24 crop season. Soybeans were planted later than normal and the second corn crop, which accounts for nearly 75% of the country’s total corn production, is still being sown. 

All that is true. This year, however, we have to deal with another variable: the wide differences between estimates, including the forecasts released by sources considered “official” by the market: Conab, Brazil’s federal crop agency, and the USDA. 

On Feb 9, Conab made another cut to Brazil’s soybean production estimate, which was put at 149.4 million metric tons, about 13 million down from the initial estimates due to the impact of hot, dry conditions on several states, especially Mato Grosso, the country’s largest producer. … Continue reading

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What is happening in Argentina?

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

Javier Milei, the new president of Argentina, has drawn the attention of the global press since he took office on Dec. 10 last year. Milei represents the anti-establishment and interrupts a sequence of 23 years under the executive leadership of the Justicialist Party (JP), a left-leaning party. The 23-year PJ run was interrupted only once between 2016 and 2020, when the Argentines elected Mauricio Macri president. Macri’s term ended with a bitter taste of frustration as he failed to implement any significant changes in how the country was run.

President Milei started his term quite differently. On Dec. 27, 2023 (less than a month in office), he submitted a collection of 664 proposals to Congress in an effort to implement the political, social, and economic reforms that convinced his supporters. The reformist project titled Bases and Starting Point for the Freedom of Argentines tackles sensitive issues in many sectors of the economy, including agriculture and livestock.… Continue reading

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2023, a year to be fondly remembered in Brazil

By Daniele Siqueira, Head of Market Intelligence with Brazilian consultancy AgRural

In early January, Brazil is starting to harvest its 2023/24 soybean crop and preparing to plant the 2024 “safrinha” corn crop, which is sown right after. The country has faced weather woes since the beginning of the soybean planting in mid-September, with below-normal rains and high temperatures in north-central states. Mato Grosso, Brazil’s largest producer, is the most affected state, with losses estimated between 5 million and 10 million metric tons.

For Brazil as a whole, there is a wide range of estimates, with some sources still putting production above the bumper crop harvested last year and others already ruling out a new record due to losses caused by hot, dry conditions. 

North-central states have received more regular and very welcome rains since late December, which have given a boost to areas planted later, especially in the North/Northeast of the country.… Continue reading

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Will official agencies review Brazil’s crop projections again?

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

The grain season continues to unfold in Brazil. Since the publication of our December article in the South American Update, official agencies have opened their eyes to the challenging weather conditions faced by grain growers in Brazil. Early in the season, USDA and CONAB were overly ambitious, projecting Brazil’s soybean production at 163 million and 162 million metric tons, respectively. While some patriotic commentators shared praise through social media networks, others were skeptical about two straight record-high seasons.

In their most recent reviews, USDA lowered its projection by 1 million metric ton (MT), and CONAB reduced theirs to 160.2 million MTs. At this point in a season with so many uncertainties, any projection offered is an informed guess at best. Based on connections and personal conversations with growers from different regions in Brazil, I’ll take the chance and suggest that both official agencies will soon review their numbers again.… Continue reading

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How can a crop failure in Brazil impact soybean prices?

By Daniele Siqueira, Head of Market Intelligence with Brazilian consultancy AgRural

I am writing this text in early December, with about 90% of Brazil’s 2023/24 soybean crop already planted. It hasn’t been an easy season. Thanks to El Niño, several producing areas in central and northern Brazil have experienced hot, dry conditions since September, when the planting season began. Southern states, on the other hand, have struggled with above-normal rains. 

Mato Grosso, Brazil’s largest producer, is the most affected so far. The state, which accounts for about 25% of the Brazilian soybean production, has lost approximately 5 million metric tons of its potential production, which is seen now at 40 million. And losses can be bigger than that if weather conditions remain unfavorable in December, when most of Mato Grosso’s crop fills pods. 

Weather conditions were so severe in October and November that some fields in western Mato Grosso are getting ready for harvest just 70 days after emerging, with up to 50% yield losses.… Continue reading

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Even with a rough start, Brazil’s grain season poised for continued growth

By Guil Signorini, Department of Horticulture and Crop Science, The Ohio State University

The changing climate impacts agricultural production and creates logistical challenges globally. Recently, the USDA Agricultural Marketing Service highlighted record low water levels in the Mississippi River System, causing unprecedentedly high grain barge rates in all seven originating locations along its rivers. Southbound barge rates in the Cincinnati and Lower Ohio stretches were 75% and 60% above the 10-year average for October (2012-2021). The Mississippi water level was also critical in October 2022, leading to operational halts and reduced barge loads. What was supposed to cost $27.60 per ton of grain transported via barges to Louisiana ports in normal conditions exceeded $93.40 per ton in October 2022 and $45.16 in October 2023. Over 60% of all U.S. soybean exports occur between October and January every year, and over 90% of the soybeans we export leave the country through Louisiana ports.… Continue reading

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Brazilian farmers have paid a price for all the 2023 records

By Daniele Siqueira, Head of Market Intelligence with Brazilian consultancy AgRural

Brazil’s agriculture has established fresh records in 2023, setting new all-time highs for corn and soybean production. Even facing the phenomenon La Niña for a third consecutive year, the country was able to produce 155 million metric tons of soybeans. Only one state, Rio Grande do Sul, at Brazil’s southern end, had a drought-related crop failure, but other states made up for the losses, with record yields almost everywhere. 

Corn production, driven by the second crop (known as “safrinha” and planted right after the soybean harvest), had a bad start caused by planting delays. But farmers were very fortunate after that, receiving beneficial rains even in the driest months of the year and escaping from frosts in states where temperatures normally drop during pollination and grain filling. As a result, Brazil was able to produce 132 million metric tons, well above the already good 113 million harvested in the previous year. … Continue reading

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