September 5, 2024
Argentina set for largest soybean expansion in a decade, Brazil's growth slows
Argentina is poised to see its largest expansion in soybean planting in over a decade during the 2024-25 season, while Brazil's soybean plantings are expected to grow at their slowest rate in the same period, Farm Policy News reported.
According to Reuters' Maximilian Heath, Argentine farmers are shifting towards soybeans in the current season, reducing the area devoted to corn following a severe insect plague that affected the previous corn harvest. Improved weather forecasts for soybeans are also contributing to this trend. Analysts suggest that this shift could lead to a significant expansion in soybean planting, which may boost global supplies. Argentina, a leading exporter of processed soymeal and oil, could see this as a major opportunity amidst already subdued global prices.
Meanwhile, Brazil, the world's largest soybean producer, is facing a slowdown in soybean planting. Reuters' Karen Braun reported that the recent price slump has made the oilseed less appealing to Brazilian farmers, despite expectations of a record crop. China's COFCO International has forecast that Brazil's soybean plantings in 2024-25 will grow at the slowest pace in a decade due to lower profit margins for farmers. This trend aligns with predictions made earlier by the US Department of Agriculture (USDA).
In Argentina, soybean planting areas have decreased in recent years due to competition from corn. However, the threat of another leafhopper plague, which devastated the last corn harvest, is expected to reduce corn planting by an estimated 2 million hectares (4.9 million acres). A significant portion of this land is expected to be used for soybean planting. Cristian Russo, head of agricultural estimates at the Rosario grains exchange, reported that last year, 16.8 million hectares were planted with soybeans.
Aníbal Córdoba, a farmer in northern Argentina, confirmed that producers in his region are incorporating more soybeans into their plans. He noted that his group typically plants 35% to 40% of their land with corn, but this season, they plan to reduce that to 20-25%, replacing much of the corn with soybeans.
The anticipated 2-million-hectare shift towards soybeans could represent the largest expansion since notable increases in 2012, 2008, and 2003.
In Brazil, the expected slower growth in soybean planting aligns with historical trends. Braun noted that Brazil's largest annual increases in soy planting occurred during periods of lower global stocks and stocks-to-use ratios. In recent years, soybean planting growth ranged between 4.4% and 7%, compared to the lower rates of 2% to 3.7% during 2015-16 and 2019-20 when prices were low, and global supplies were high.
Despite the slower growth in Brazil, global soybean stocks are expected to reach record highs. The USDA projects that global soybean stocks in 2024-25 will be nearly 22 million metric tons higher than the previous year, with stocks-to-use ratios approaching 2018-19 levels. Brazil's role in this surplus is significant, as the USDA forecasts a 10% increase in the country's soybean crop, with an area increase of 3.3%. However, global soybean consumption is only expected to rise by 5%.
Brazilian farmers are scheduled to begin sowing soybeans for the 2024-25 harvest next month.
- Farm Policy News