Soybean prices fell again despite lower production forecasts in Brazil

Source:  GrainTrade

Yesterday on the Chicago Stock Exchange, March soybean futures fell 1.6% to the lowest level since December 2020 at $426.5/t (-5.6% on the month) under pressure from the acceleration of harvesting of the record soybean harvest in South America and low export rates from the USA.

According to the USDA, during February 9-15, soybean exports decreased by 34% compared to the previous week to 1.185 million tons, and in total in the season reached 31.969 million tons, which is 30% less than the 41.4 million tons exported during this period last year .

According to the forecast of the Anec agency, Brazil will export 7.3 million tons of soybeans in February (7.55 million tons in February 2023).

The weather in Brazil is conducive to soybean and corn harvest and active planting of second-crop corn, especially in the central regions. Currently, soybeans are harvested on 32% of the area (25% last year), and first-harvest corn – on 21% of the area (14% last year).

45% of the planned areas have already been sown with second-harvest corn (33% last year), which, against the background of favorable rainfall, allows analysts to raise harvest forecasts.

Experts at Safras & Mercado forecast Brazil’s 2023/24 MY corn crop at 125.9 mn t (140 mn t in 2022/23 MY) due to a 6.2% reduction in planted area, while the USDA estimates a harvest of 124 mn t However, high sowing rates can still change the situation.

The Agroconsult company has been conducting a crop tour of the main soybean-growing regions in Brazil for 33 days, and has already surveyed 60% of the areas planned for inspection. As a result of the recorded decrease in productivity, the forecast for soybean production in 2023/24 MR has been reduced from 153.8 to 152.2 million tons, even despite the increase in the area sown.

According to current estimates, the soybean yield in the state of Mato Grosso will be 17.7% lower than last year, in the state of Mato Grosso do Sul – by 2.6%, in the states of Paraná and Rio Grande do Sul – by 9.4% and 8.1%, respectively.

According to @profarmer , Dr. Cordognier lowered Brazil’s soybean crop forecast by another 2mt to 145mt as late-maturing crops will not be able to compensate for low yields in early-maturing crops.

The agency Conab estimates the soybean harvest in Brazil at 149.2 million tons (162 million tons last year), and the USDA – at 156 million tons.

The second largest soybean harvest in Brazil and the recovery of production in Argentina from last year’s 25 million tons to 50 million tons will significantly increase the volume of offers on the world market in the coming months, which will increase the pressure on the prices of all oilseeds.

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