The USDA maintained soybean production in Brazil for the 2023/24 season at 163 million metric tonnes in its October update, projecting another record crop for the second consecutive season. However, insufficient rainfall and poor soil moisture have raised concerns for crop output and yield. Dryness in Brazil’s northern and centre western regions, including the Amazons, has reportedly led to unfavourable conditions for the early developmental stages of the crop, such as germination, with some of the early planted crop having to be replanted. According to the Brazilian National Association of Grain Exporters (Anec), the severe drought in the Amazon has led to grain exporters re-routing some of their cargos to southern port terminals in lieu of northern ports, as Amazonian River levels reached record lows this week. However, the association noted that while exports from the northern ports have been limited in recent days, overall Brazilian exports will not be impacted as shipments can continue at the same level from southern ports. On the other hand, farmers in the southern regions, including Rio Grande do Sul, have faced excessive rainfall, which could delay soybean harvesting. Weather patterns in the coming weeks will be a watch-out factor, with market participants opining that the likelihood of a downward revision to the Brazilian crop due to the aforementioned adverse weather conditions could lead China to boost its soybean imports from the US, presenting an upside risk to prices.
