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Threat to Brazil’s Soy Crop Grows as Erratic Rainfall Persists

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Not enough rain in Brazil’s center regions and too much rain in the south — conditions likely exacerbated by El Niño — increasingly threaten the world’s largest soybean crop. 

The unfavorable weather has already pushed Brazilian farmers to delay planting, as Gro wrote about here. An estimated 83% of the projected soybean acreage of 45.3 million hectares was planted as of December 2, down 8 percentage points year on year, according to Brazil’s CONAB.

Brazil’s soybean crop, which is harvested beginning in January and February, still has time to recover should conditions improve. Still, the situation bears continued monitoring. 

In Mato Grosso, the top soybean-producing state, early season conditions resemble those seen in 2015/16, also an El Niño year, when soybean yields in the state declined by 8.3% year over year. For all of Brazil, soybean yields fell by 5% in 2015/16. 

This year, precipitation in Mato Grosso during October and November was 53% below the 30-year average, although recent rains have lifted soil moisture levels. Still, drought readings are close to “severe” levels as measured by the Gro Drought Index and are the second highest in 20 years, as seen in this display from Gro’s Climate Risk Navigator for Agriculture, weighted for Mato Grosso’s soybean-growing areas.

Southern Mato Grosso could see some relief in the coming weeks, with near-normal temperatures and precipitation predicted through mid-December, according to Gro forecast data. However, above-average heat and limited rainfall are forecast to persist in the northern part of the state.

Conversely, conditions in Brazil’s south remain extremely wet. Since September, more rain has fallen in the state of Rio Grande do Sul than during the same period in any year since 2000, as this Gro Navigator display shows. While the abundant rainfall could boost soybean yields in the state, overly wet conditions could reduce planted area.

Brazil’s soybean production is currently forecast to surpass last year’s record output, although estimates are likely to be revised lower. Any production shortfall by Brazil would have ramifications for oilseed prices worldwide, which could in turn influence how much soy US farmers plant for the 2024 season. Brazil and the US compete to satisfy China’s soybean import demand, which has skyrocketed to record levels over the last two decades, as seen in this Gro display.

Gro’s machine learning-based crop yield forecast models, included with our South America Soybean Production Monitor and South America Corn Production Monitor, will go live and generate daily forecast updates starting in mid-December once the crops are established. The Monitors also cover crop prospects in Argentina, where soybean production looks likely to rebound from last year’s slump, as Gro highlighted here.

Erratic precipitation could cut into Brazil's new soybean crop, the world's largest, and impact soybean supplies and prices worldwide. Scant rain has fallen in Brazil's center-west states, including top soy producer Mato Grosso, in the past month. Meanwhile, southern regions have been inundated with rain, forcing farmers to delay planting. (The map's red areas are regions with below-average rainfall; blue areas have had above-average rain.) Brazil's soybean crop could still recover if conditions improve, but weather conditions bear close monitoring.

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