Brazil Further Cuts Soy Forecast Due to Weather

Weather issues have led the Brazilian Association of Vegetable Oil Industries (Abiove) to cut its soybean yield forecast for 2023–24.

Now, they expect 156.1 million tons, down from previous forecasts. This adjustment reflects the impact of adverse conditions on crop growth stages.

The National Supply Company (Conab) also sees a decrease, estimating 155.3 million tons.

This is slightly more than last year but could drop further, as some analysts suggest.

Abiove notes that the soy planting area has expanded to 45.2 million hectares.

Despite this growth, expected yields per hectare have fallen due to heavy rains in the South and heat plus irregular rain in the Midwest.

Mato Grosso, a top grain-producing state, will likely see a 15.2% yield decrease.

The Mato Grosso Institute of Agricultural Economics (Imea/Famato) predicts this will lead to a total state output of 38.4 million tons.

Imea warns that lower yields mean lower prices and premiums, hurting farmer earnings. Last week, soy prices in Mato Grosso hit a three-year low.

With 40% of Mato Grosso’s harvest done, more price drops may come.

Global markets, like the Chicago Mercantile Exchange, also feel the pressure from a good supply-demand balance, helped by Argentina’s rebound.

Abiove forecasts Brazil’s soybean export price at $470 per ton in 2024, down from $523. They expect exports to decrease slightly, affecting revenue.

These changes matter as they impact global soy markets, affecting prices, farmer income, and international trade dynamics.