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USDA Cuts Deeper Into Argentina Soybean Production Estimates

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The USDA further reduced its estimates for Argentina’s soybean and corn production, forecasting that the South American soybean powerhouse would have its smallest crop in nearly a quarter century. 

In its April WASDE report, the USDA trimmed an additional 18% from Argentina’s soybean production, compared with last month’s estimate, to 27 million tonnes for 2022/23, which refers to the local 2023/24 marketing year in Argentina. Corn production was cut a further 7.5% to 37 million tonnes. 

Gro’s machine learning-based Yield Forecast Models for Argentina corn and soybeans have been projecting poor yields since the start of the country’s growing season in December. 

Meanwhile, Brazil’s bumper soybean crop will help offset Argentina’s weak output. The USDA slightly raised its estimate for Brazil’s soybean harvest while leaving its corn estimate unchanged. 

Argentina’s soybean crop has faced challenges ranging from a crippling, multiyear drought to mid-February’s unseasonably cool temperatures, followed by heat waves at the end of February and in March, as Gro wrote about here

Argentina, a key player in the international soybean market, will see its exports significantly curtailed. The country is the third-largest exporter of soybeans and the No. 1 exporter of soybean oil and soymeal. The USDA reduced its Argentina soybean crush estimates by nearly 10%, to 32 million tonnes. 

While Argentina looks set for its weakest soybean crop in 23 years, Brazil is on the verge of breaking a record in soybean production. The contrasting harvests result from the effects of La Niña climate conditions, which favor increased rain across northern Brazil and decreased precipitation in Brazil’s far south and in Argentina and Uruguay. 

The end to La Niña climate conditions in early March, after three consecutive years, could bode well for future growing conditions in these southern regions.

Uruguay soybean production is expected to be just a third of last year’s output because of La Niña-induced drought. Conversely, Paraguay is expected to more than double last year’s soybean production. 

Brazil’s second corn crop, or safrinha, is still two months away from the start of harvest, and yield prospects appear strong, according to Gro’s Yield Forecast Model. Growing conditions are favorable across most of the country, as seen in this display from Gro’s Climate Risk Navigator for Agriculture, weighted for Brazil’s corn growing areas. 

Gro’s Brazil Yield Forecast Models for soybeans and corn update daily with yield estimates down to the district level. 

For the US, the USDA left corn and soybean ending stocks estimates unchanged. However, a widening inverse between May and July futures, as shown by Gro’s Future Spread Application, is signaling tight supplies of old crop soybeans and corn. 

US wheat ending stocks saw a modest boost but still remain the tightest in 9 years. World wheat ending stocks, excluding China, are forecast to fall to a 10-year low. China’s wheat imports were raised 2 million tonnes to 12 million — the highest since 1995, and making China the leading global wheat importer in 2022/23. 

Global corn ending stocks, excluding China, were estimated at 88 million tonnes, the second-lowest in 10 years, and remains an important metric to watch.

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