November 28, 2023
Estimates for Brazil's soybean crop in 2023/24 cut as weather likely to upset output
Agribusiness consultancies Safras & Mercado and hEDGEpoint reduced their estimates for Brazil's 2023/24 soybean crop on November 24, as consensus grows that bad weather will hamper output in the world's largest producer and exporter.
Safras said it now forecasts production this season to a total of 161.38 million metric tonnes, down from the 163.25 million metric tonnes it estimated before, while hEDGEpoint cut its projection to 160.1 million tonnes from 162.3 million tonnes.
Both consultancies mentioned adverse weather as the main reason behind their decisions, as center-northern Brazil grapples with low humidity and high temperatures while southern Brazil faces excessive rains.
"If the weather doesn't get better, fresh cuts may happen," Safras analyst Luiz Fernando Roque said. "…but if there is an improvement, most of the fields may recover, resulting in still-relevant yields."
Safras noted the projection was still for a record crop even after the cut.
HEDGEpoint analyst Pedro Schicchi said the bad weather was concerning and challenges would remain even as forecasts point to some improvement going ahead, as the El Nino climate pattern was expected to remain in place until early 2024.
"So far, not only has rain been scarce, but temperatures are also exceptionally high," Schicchi said. "In the short term, forecasts are a bit better than before but still not encouraging.
"There is certainly room for more cuts if weather conditions remain bad, but there is still a lot to happen so it is quite difficult to make definitive statements before the crop reaches its reproductive stage in December-January."
Consultancy AgRural reduced its forecast for Brazil's soybean crop this month and did not rule out fresh cuts, while Agroconsult said bad weather would keep production below the Brazil's potential. AgResource also revised its forecast down.