Oct 27, 2022

Big Picture in S. America - Soybeans Maybe OK, Corn Maybe Not

Author: Michael Cordonnier/Soybean & Corn Advisor, Inc.

Looking at the "big picture" for the 2022/23 growing season in South America, the soybean production in 2022/23 will almost assuredly be larger than last year, it is just a matter of how much larger. The situation for corn is not as optimistic and there is no guarantee that the South American corn production in 2022/23 will be larger than in 2021/22.

Soybeans - The weather thus far in Brazil has not followed the predicted La Nina pattern, at least not yet. October was forecasted to be dryer than normal in southern Brazil, but it has not worked out that way. In fact, parts of southern Brazil continue to receive excessive rains, which has delayed some of the soybean planting. It remains to be seen if the forecast for dryer weather in November and December in southern Brazil verifies.

Soybeans in Brazil are 34% planted compared to 38% last year and 26% average and the crop continues to get off to a generally good start.

The 2022/23 Brazilian soybean production is anticipated to be approximately three times larger the soybean production in Argentina. Thus far, the soybean crop in Brazil is getting off to a generally good start and the weather has cooperated. It has been too wet in some areas of southern Brazil which has delayed the soybean planting, but soybean yields in Brazil can still be good even if planting is somewhat delayed. Besides, the wet weather means that the soil moisture is being recharged.

Currently, I am estimating the 2022/23 soybean production in Brazil at 151.0 million tons, which would be up 24 million tons from last year and I am not the highest estimate. Some estimates are as high as 153-154 million tons.

The soybean situation in Argentina is currently a mixed bag. The weather has been very dry in Argentina and very few if any soybeans have been planted. The main planting month is November and there is plenty of time for improved soil moisture before the soybeans need to be planted. The soybean acreage in Argentina may end up being greater than anticipated due to the potential switching of corn over to soybeans instead. Currently, I am estimating the 2022/23 Argentina soybean crop at 50.0 million tons which would be up 6 million from last year.

Therefore, Brazil could easily make up for any potential soybean production decline in Argentina. Total South American soybean production is estimated at 217.5 million tons or 37.3 million more than last year or up 20.7%. Barring some unforeseen circumstance, South America should easily produce a larger soybean crop compared to last year.

Corn - The corn situation in South America is more complicated. Brazilian farmers have reduced their first crop corn acreage in favor of more safrinha corn production and that is where there could be problems in Brazil.

More than 75% of Brazil's corn is produced as a safrinha crop after soybeans. Safrinha corn production is always a risky proposition and the safrinha corn needs to be planted as early as possible to guarantee top yields. The problem is that the soybean planting in parts of Parana and Mato Grosso do Sul has been delayed due to wet weather and that in turn will delay the safrinha corn planting early next year. In some of the wetter areas, we already know that some of the safrinha corn will be planted 30 days or more later than normal, which will push the corn planting into March.

Late planted safrinha corn yields can still be OK, but the summer rains need to extend into late May to assure good yields. During the 2021/22 growing season, the rains ended in late March and the safrinha crop ended up disappointing. The 2022/23 Brazil corn production is currently estimated at 125.5 million tons or up 9.5 million tons.

The corn situation in Argentina is complicated. The planting of the early corn is being delayed by dry conditions forcing some farmers to plant more late corn or switch some of their intended corn acres to soybeans instead. The current estimate for the 2022/23 corn production in Argentina is 51.0 million tons, which is about equal to last year.

Total South American corn production is estimated at 183.5 million tons or up 9.1 million or 5.2%. The margin of error for corn production in South America is much smaller than for soybeans and there is no guarantee that South America's 2022/23 corn production will be larger than in 2021/22