South America’s soybean production numbers continue to shrink due to unfavorable weather. Dr. Michael Cordonnier, an agronomist with Soybean and Corn Advisor, Incorporated, says some fields are too wet, while others are too dry.
“The weather in Brazil continues to be generally wet across the north and dry in the South. Now, they’re getting some rain in southern Brazil and a little bit more rain in the forecast, but the damage to the soybeans and the first crop of corn is already locked in. I lowered my Brazil soybean estimate two million tons to 138; I have a lower bias going forward. I put my minimum at 134 (million metric tons), and I noticed yesterday that StoneX also lowered their Brazil estimate to 134 for soybeans. But what we don’t know is the wet conditions in Central Brazil and how they’re going to impact the soybeans. There are only a few fields harvested in Mato Grosso, fields are fine, but there’s also reports of moldy seed, so you have to kind of wait and see how that plays out.”
He says dry weather is a problem in Argentina as corn and soybeans hit a critical growth point.
“My biggest change this week was for Argentina, and I lowered the soybeans three million tons to 45 (MMT). I have a lower bias. In the drier areas of Argentina, like sort of central-northern and eastern areas, temperatures were really hot last week; they were over 100 degrees. Now, temperatures are going to cool off this week to a little bit above normal, but it’s below normal rainfall for this week as well. Now the soybeans in Argentina are 81 percent planted, 30 percent are flowering. And the corn is 70 percent planted, and about 50 percent of the first crop of corn is pollinated. So, both crops in Argentina are now entering their critical reproductive phase, and the forecast is very worrisome.”
If rains continue to fall, the soybean crop could take a big hit from moldy seeds.
“Some areas of central Brazil, they haven’t seen the sun in over 60 days. It has been constant overcast and cloudy with off-and-on rain. There are already reports of seed sprouting in the pod. Now, this is going to get more important in about a week or two because, right now, just a few fields are mature, but, over the next one to two weeks, more soybeans become mature, and you’re gonna need some drier weather, or we’re gonna have some delays in getting the first soybeans harvested in Brazil.”
The challenges in South America should push U.S. soybean prices higher as the market takes note of the issues.
“Oh yes, absolutely. And the market was not very in tune with it before Christmas, but now it’s getting more in touch with the problems of South America. Before, we’ve just worried about Brazil, but now we’ve got to worry about Argentina as well. You know Argentina, for like two months, were getting just in time rain, just enough to keep things okay, but now, maybe their luck has run out.”
Cordonnier says the South American soybean loss will likely mean more export opportunities for U.S. soy in the months ahead.