Soybean prices continue to fall, despite lower crop forecasts in Argentina and Brazil

Despite lower crop forecasts in Argentina and Brazil, soybean prices continued to fall under the pressure of a difficult situation in the US banking system. Traders believe the bankruptcy of two major banks involved in cryptocurrency could sharply lower fuel and food prices.

In a March report, experts from the Brazilian agency Conab reduced, compared to February estimates, the forecast of soybean production in Brazil in 2022/23 MR by 1.5 million tons to 151.4 million tons, which are planned to be harvested from 43.5 million hectares (last year from 41, 125.5 million tons were threshed on 5 million hectares).

According to AgRural, soybeans in Brazil are now 53% harvested, down 11% from last year’s above-average rates thanks to dry weather. 82% of the second crop corn was sown in the central-southern region compared to 94% on the same date last year.

In view of the expected improvement in yield, the general forecast for corn production in Brazil in 2022/23 MR has been increased compared to February estimates by 0.9 million tons to 124.7 million tons, which are planned to be harvested from 22 million hectares (last year from 21.6 million 113.1 million tons of grain were threshed per hectare). At the same time, the forecast for the production of corn of the first harvest was increased by 300 thousand tons to 26.8 million tons, which are planned to be collected from 4.4 million hectares, and of corn of the second crop – by 600 thousand tons to 95.6 million tons, which are to be collected from 17 million hectares

Analysts at the Buenos Aires Grain Exchange have again lowered their forecasts for Argentina’s soybean and corn production in 2022/23 amid a severe drought that has been ongoing since last May. Compared to previous estimates, the soybean harvest forecast was lowered from 33.5 to 29 million tons, and corn – from 41 to 37.5 million tons.

On the exchange in Chicago yesterday, May futures for soybeans fell by 1% to $547.9/t (-2.7% for the month, +6.4% for the year), and for corn – by 0.6% to $241.5/t (-11.1% for the month, -6.5% for the year).

The pressure on quotations additionally increases the decline in Brent oil prices, the May futures for which yesterday fell by 2.5% to $80.75/barrel (-5.6% for the month, -7.7% for the year).

Tags: Argentina, Brazil, prices, soybean