BRAZIL – Recent floods in southern Brazil and lower yields across several states have significantly reduced soybean production expectations for the 2023-24 marketing year. 

According to the Foreign Agricultural Service (FAS) of the US Department of Agriculture (USDA), Brazil’s soybean production is now projected at 150 million tonnes, a decrease of 2.6 million tonnes, or 2%, from the previous estimate in March.

The July 1 report from the Global Agricultural Information Network highlighted that the unprecedented floods in May in the southernmost state of Rio Grande do Sul, coupled with lower yields in Mato Grosso, Mato Grosso do Sul, Paraná, and São Paulo, have contributed to this decline. 

National yields have been revised to 3,275 kg/ha (48.7 bushels per acre), 3% lower than the March estimate and 10% below the record productivity of 162 million tonnes in the 2022-23 season.

In response to the lower soybean output and solid gross crushing margins, the FAS has adjusted its export estimates downward to 94 million tonnes. At the same time, crush volumes have been increased to 55.1 million tonnes for 2023-24 to meet domestic demand. 

This adjustment is driven by an increased biofuels blend mandate, attractive gross margins, and Argentina’s resumption of high soybean crushing and exports, again positioning it as a world leader.

“This may reduce the incentives for Brazilian crushers to export processed products, particularly soy oil, redirecting its supply to domestic consumption,” the FAS noted.

Domestic soybean consumption is expected to reach 58.75 million tonnes in 2023-24 and 59 million tonnes in 2024-25. Additionally, the FAS has revised its 2024-25 soybean area forecast upward by 650,000 hectares to 46.3 million, maintaining a 1% area increase from the previous report. 

This projection suggests a slowdown in Brazil’s soybean area expansion, which has averaged nearly 4% yearly growth over the last decade.

For the 2024-25 season, production is forecasted at 160 million tonnes, an increase of 2.5 million tonnes, or 2%, from the previous estimate. 

Farmers are investing in quality seeds, inputs, and fertilizers despite rising costs to improve yields rather than expanding the cultivation area. The national yield forecast for this period is 3,456 kg/ha.

The FAS has kept its soybean export forecast at 99 million tonnes for 2024-25, citing sustained international demand, especially from Asia, higher harvested volumes, a favorable exchange rate, and increased competitiveness compared to other major producers like the United States.

China’s demand for soybeans remains robust, with imports from February to May 2024 totaling 29.5 million tonnes, close to the 31.5 million tonnes recorded in the same period in 2023. 

During this time, Brazil supplied 70% of the volume (20.6 million tonnes), while the United States accounted for 26% (7.5 million tonnes).

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