Though 1.1 million smaller than forecast in January, the crop will be 15.8 million tons larger that last season’s, and will still be a record.

Problems in Rio Grande do Sul and Mato Grosso do Sul, where farmers “abandoned” some areas and losses are “irreversible” in some places, have been offset by good yields in other states, the consultancy said.

In Mato Grosso, for example, Agroconsult expected average yields at 63 bags per hectare before the crop tour started. The yield forecast has now been increased to 66.5 bags per hectare, a new record.

For the first time in history, Mato Grosso’s soy output may surpass 50 million tons, Agroconsult said.

Agroconsult also rose the estimated Brazilian soybean planted area by 100,000 hectares to 47.6 million hectares, up 1.7 per cent from last season.

—Reporting by Ana Mano

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The “excellent crop” in Brazil’s top-grain producing state Mato Grosso helped offset the reduced yields in other areas, AgRural said, though cautioning that grain quality there may drop if excessive rainfall is registered in February.

Brazilian farmers had harvested 3.9 per cent of their soybean crop by last Thursday, the consultancy added, the lowest level for this time of year since the 2020/21 cycle as adverse weather conditions have been affecting work in the fields.

Lower rainfall volume in Mato Grosso helped producers make some progress last week but harvesting is still delayed in the state, AgRural said. At the same time last year, 10.8 per cent of Brazil’s soy crop had been reaped.

The delayed soy harvest has also impacted sowing of Brazil’s second corn crop, which represents about 75 per cent of the national production each year and is planted after soybeans are harvested on the same fields.

Second corn planting in Brazil’s key center-south region had reached 2.2 per cent of the expected area by Thursday, AgRural said, up from 0.3 per cent in the prior week but well below the 11.4 per cent seen a year earlier.

— Reporting by Gabriel Araujo

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Farmers across Brazil have reaped 0.3 per cent of the soy area, down from 2.3 per cent a year ago, according to AgRural data. Mato Grosso’s own harvest, however, is at the slowest pace for this time since the 2017/2018 season, AgRural’s analyst Adriano Gomes said in an interview.

“Although Mato Grosso’s harvest has great potential and there are still no complaints about quality losses, the humidity makes it difficult for machines to enter the field,” AgRural said in a statement.

Brazil’s soy harvest began in three central-western states, Parana state and in irrigated areas of the states of Bahia and Minas Gerais, according to AgRural.

Mato Grosso accounts for more than a quarter of the Brazilian soy harvest, and delays in the work could affect the ideal planting window for second corn, which is sowed after soy is reaped on the same fields.

“Frequent rains not only hinder the loss of moisture in areas that are already ready (for harvesting), but also raise concerns about the extension of the cycle,” said Gomes, who added that delays in second corn planting increase climate and logistical risks.

The percentage of second crop already planted in Mato Grosso is negligible, with farmers preferring to plant cotton in the first areas freed from soy, Gomes said.

In other areas, such as southern Brazil and the south of Mato Grosso do Sul, the problem for soybeans is the lack of regular rain and the heat.

“It needs to rain urgently in these regions,” Gomes said. “Some soybean areas that were most affected by the drought are already experiencing losses in yield potential.”

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The upward revision was driven by higher expectations for the area planted with the oilseed in the South American country and increased yields, according to StoneX, which estimated production to be 14.4 per cent higher than in the previous season.

Farmers in Brazil, the world’s largest soy producer and exporter, are set to see yields recover in the current cycle after grappling with adverse weather in 2023/24, which affected overall production of the oilseed.

“Everything points to soybean production exceeding 170 million tons, but the weather remains on the radar as there is a possibility of excessive rainfall at the end of the cycle, which could cause some damage,” StoneX analyst Ana Luiza Lodi said.

Soybean exports in the season were forecast to hit 107 million tons, up from the 103 million tons the consultancy had projected before.

StoneX also slightly increased its estimate for Brazil’s 2024-2025 total corn production to 128.6 million tons from 128.3 million tons.

—Reporting by Isabel Teles and Gabriel Araujo

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Corn futures were narrowly mixed on South American weather and light spillover pressure from soybeans, while wheat was mostly lower amid ample global supplies.

A firmer U.S. dollar anchored grain markets in general as a stronger greenback makes dollar-denominated commodities costlier for those holding other currencies.

Chicago Board of Trade January soybeans ended down 4-1/4 cents at $9.85-1/4 a bushel and March corn was down 1/2 cent at $4.32-1/2 a bushel. CBOT March wheat fell to a three-month low but ended down 3/4 cent at $5.47-1/4 a bushel.

Soybean futures were pressured by abundant U.S. supplies and by updated Brazilian crop harvest forecasts suggesting the upcoming harvest there will shatter previous records.

Brazil’s Agroconsult on Thursday raised its harvest outlook to 172.2 million metric tons, nearly 10 million tons above the 2022/23 season record. Agribusiness consultancies Celeres and StoneX also raised their crop estimates to fresh records on Monday.

“There’s no shortage of beans in the U.S. or in South America, with a crop coming at us,” said Don Roose, president of U.S. Commodities.

Traders shrugged off another U.S. Department of Agriculture announcement of soybean sales to China on Monday, the latest in a string of purchases by the top importer. The recent deals were seen as routine U.S. soy purchases ahead of Brazil’s peak export season.

U.S. wheat remained under pressure as competition from cheap Argentine and Black Sea wheat outweighed a decision by Russia to cut its 2025 wheat export quota by two-thirds and raise wheat export duties. Most deferred-month contracts posted fresh lows on Monday.

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The crop consultant who specializes in South America said soybean planting in Brazil has dramatically turned around to being the second fastest on record at 54 per cent complete for early November. Cordonnier pointed to the above average rainfall Brazil received in October following a very dry September.

“The soybeans are germinating and emerging uniformly. The crop is in good condition for what’s up already,” he said, noting he’s very optimistic about the crop, projecting it to be 165 million tonnes.

“That might go up if the weather continues to co-operate,’ Cordonnier added.

As for Brazilian corn, he said the country’s first crop was 59 per cent planted, with some states such as Parana almost finished.

Cordonnier estimated that first crop at 23 million tonnes and the second crop, known the safrinha crop and planted in January and February, at 100 million tonnes.

“The concern was a month ago everybody thought the soybeans would be planted extra late and there wouldn’t be enough safrinha corn. That scenario has changed somewhat,” he explained.

Cordonnier said he’s not as optimistic when it comes to Argentine soybeans and corn.

“The weather in Argentina has not caught on as good as in Brazil. They’ve been having light to moderate showers,” he said, adding that’s the weather outlook for the next two weeks.

While soybeans planted in Argentina was only 3.3 per cent finished, Cordonnier said corn planting was at 34 per cent done.

A major benefit to Argentina corn so far this year he stressed was the estimated 90 per cent decline in corn leafhoppers compared to last year.

In 2023/24, corn leafhoppers spread spiroplasma disease that cut into the country’s corn output and made growers wary about this year’s crop.

“A month or two ago, everybody including myself thought farmers would reduce their (corn) acres because they were afraid of the leafhoppers and low prices,” Cordonnier commented.

But with improving weather, far fewer corn leafhoppers and prices beginning to rise, he suggested there could be more corn seeded in Argentina in 2024/25 than initially anticipated.

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Meanwhile, the Brasilia desk reduced their call on the 2023/24 soybean harvest, having placed it at 150.0 million tonnes versus the USDA projection of 153 million. The reason being the flooding in Rio Grande do Sul and yields in a number of states coming in below expectations.

The attaché raised the Brazil soybean crush for 2023/24 to 55.1 million tonnes versus the USDA’s 54.0 million, due to greater production of biofuels. That also saw total domestic use raised a little at 58.75 million tonnes compared to the official call of 57.75 million, but exports were cut to 94.0 million tonnes as opposed to the USDA’s estimate of 97.0 million. In the end, there’s a wide disparity in the carryover, with the attaché a pinch below 3.60 million tonnes and the USDA at 6.82 million.

The attaché and the department forecast a larger soybean crop in 2024/25, but the former placed their number at 160.0 million tonnes compared to the USDA’s more optimistic figure of 169.0 million.

There’s also a difference in Brazil’s soybean crush with the attaché at 55.30 million tonnes versus the USDA at 54.50 million. However, they are quite close when it comes to domestic use with the Brasilia desk at 59.0 million tonnes and the department at 58.50 million. As for exports, there’s a large difference, as the attaché projected 99.0 million tonnes versus the USDA’s 109.0 million. As for the ending stocks, the attaché came to 5.85 million tonnes while the USDA stood at 8.47 million.

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When the USDA released its World Agriculture Supply and Demand Estimates on Apr. 11, the department kept its estimate on Brazil soybean production for 2023/24 at 155 million. Also that day, Conab issued its monthly report, which trimmed its projection to 146.52 million tonnes from the 146.86 million in March.

Early notions of Brazil soybean output exceeding 160 million tonnes were dashed this marketing year due to severe dryness and heat in the country’s northern half, and extremely wet conditions in the southern half. Those widely different conditions made planting very difficult.

Numerous private consultancies steadily reduced their estimates, with several of them predicting a harvest of less than 150 million tonnes. However, the USDA has remained steadfast with its estimates, indicating it believes the crop is much larger than what most others think it will be.

One of those consultancies expecting a Brazil soybean crop at less than 150 million tonnes has been Dr. Michael Cordonnier of Soybean and Corn Advisor Inc. in Hinsdale, Ill. In his most recent calculations, Cordonnier raised his forecast by two million tonnes, expecting the harvest to come in at 147 million tonnes.

As for the wide difference between the USDA and Conab, Cordonnier said it has been the source of a lot of discussions.

“I think part of the problem is the hot and dry weather in Brazil last October and November. Some of the soybeans were replanted several times or even switched to another crop. So what looked like soybeans on the satellite at the start of the season maybe did not end up as soybeans at the end of the season,” Cordonnier stated.

Also he pointed a difference in soybean acre estimates, with Conab at 111.78 million and the USDA believing there’s more.

“The USDA thinks that Conab has not accounted for the expansion of soybean acreage in northeastern Brazil. They may have a point because maybe the farmers are not reporting all their acreage to the Brazilian government for whatever reason. On the other hand, Conab uses satellite technology to estimate acreage just like the USDA, so why is there a difference of almost two million acres of soybean between the two estimates,” said Cordonnier, adding he’s not sure which agency is correct.

A Conab spokesperson said in an email the agency compiles its data through a variety of methods, including several forecasting models, as well as considering the weather conditions of Brazil’s several states, farmer surveys, past data, and crop tours.

“In relation to the various organizations that carry out harvest research, Conab’s principle is to respect the methodologies applied by these entities, understanding that each method has its specific particularities, suited to the availability of human and financial material and other factors that enable execution of the methodology,” the spokesperson wrote.
USDA oilseed analyst Joanna Hitchner explained why the USDA has produced soybean numbers for Brazil higher than those from Conab.

“When estimating Brazilian crops, USDA uses all available data, including CONAB and Brazil’s state agencies. We review CONAB’s estimates because CONAB shows a complete look at the crops in the country. We also use satellite imagery for yield analysis, weather variables, soil moisture maps, and our post reports in Brazil and other publicly available data,” Hitchner stated.

“The USDA shows larger soybean crops than CONAB across several years because we use a balance sheet approach to reconciling the crop.  After the marketing year is complete, USDA reconciles its crop estimate with final use data for Brazil using official soybean export data reported by SECEX and crush data reported by Associação Brasileira das Indústrias de Óleos Vegetais (ABIOVE), the widely accepted source for Brazilian crush data,” she added.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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The projected ending stocks for Brazilian corn were raised 200,000 tonnes from the February estimate at 6.17 million, which could bring more pressure to already beleaguered U.S. corn futures. While the carryout into 2023-24 was adjusted higher by 1.2 million tonnes at 11.47 million, domestic feed use increased by one million tonnes at 64.5 million. Production remained unchanged at 124 million tonnes.

In Argentina, ending stocks remained at 1.03 million with production and exports each going up one million tonnes at 56 million and 42 million, respectively.

Brazilian soybeans saw a marked reduction in projected ending stocks for 2023-24, losing 3.25 million tonnes at 33.05 million. Exports increased by three million tonnes at 103 million, while production was down one million tonnes at 155 million and domestic crush was cut by 750,000 tonnes at 53 million. In Argentina, production remained the same at 50 million tonnes with ending stocks unchanged at 25.96 million.

U.S. wheat saw its 2023-24 estimated carryout rise by 15 million bushels at 673 million, due to an equivalent reduction in exports to 710 million. Production was unchanged at 1.812 billion bushels.

U.S. corn saw no changes from its February estimates, with production remaining at 15.342 billion bushels and ending stocks at 2.172 billion. U.S. soybean production and ending stocks were also unchanged at 4.165 billion and 315 million bushels, respectively.

Projected global ending stocks for 2023-24 corn were cut by 2.43 million tonnes from the February estimate at 319.63 million. Beginning stocks were raised 1.37 million tonnes at 301.62 million, but production fell by 2.33 million at 1.230 billion and domestic use increased by 1.48 million at 1.212 billion.

World ending stocks for soybeans dropped by 1.76 million tonnes at 114.27 million. Beginning stocks were also down by 1.42 million tonnes at 102.15 million and production was cut by 1.36 million tonnes at 396.85 million.

Projected world wheat ending stocks declined by 610,000 tonnes at 258.83 million. Beginning stocks were down by 110,000 tonnes at 271.1 million, but production is set to rise by 960,000 tonnes at 786.7 million.

— Adam Peleshaty reports for MarketsFarm from Stonewall, Man. 

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“We are trading at levels unseen since 2022. I just don’t see a reason why anything can rally, unless there’s something really unforeseen,” Palmer stated.

“The [speculative] funds rule the roost these days, and whatever the funds are going to do, they’re going to take the market wherever they want to,” he added.

In the Commitment of Traders report from the United States Commodity Futures Trading Commission the net managed money short position in canola was 120,758 contracts as of Jan. 9. That marked one of the largest shorts since 2018 for the Canadian oilseed.

Meanwhile, Palmer said farmers were long by storing much of their canola.

“The last three years…prices were higher. It’s a total reverse, prices are lower and [farmers] are looking for a miracle play on the upside,” he commented.

One such miracle he said could be a huge jump in exports, which are extremely unlikely at this time.

The Canadian Grain Commission reported canola exports of 2.65 million tonnes 23 weeks into the 2023/24 marketing year were more than one million tonnes behind last year’s exports.

Palmer pointed a major bearish influence on canola – the forthcoming South American soybean harvest, which will be massive despite cuts to Brazil’s output. Initial estimates placed Brazil soybeans at about 160 million tonnes, but extremely dry conditions in the central and northern growing areas plus an excessively wet south hampered the crop’s planting. Now, numerous private consultancies lowered their projections to either side of 150 million tonnes, with one chopping its call to about 135 million.

However, reports said Argentina is set to double its soybean production from last year with expectations at around 50 million tonnes, which more than compensates losses in Brazil.

With such an influx of soybeans to come onto the market shortly, Palmer said decent canola supplies and a lack of demand for the Canadian oilseed, means the outlook in the coming weeks and months is not very good.

— Glen Hallick reports for MarketsFarm from Winnipeg. 

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