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South American soyabean production forecast is set to decline due to poor weather conditions

January 11, 2022

1 mins read

The soyabean price on the Chicago Board of Trade (CBOT) increased by 8% to USD 504.3/MT in the last three weeks up to 5th January 2022, amid adverse weather conditions in Brazil and Argentina (top soyabean producers). High temperatures and drought hit Brazil’s soyabean crop, predominantly in the southern states of Paraná, Santa Catarina, and Rio Grande do Sul. This led to a reduction in the previously estimated record-high crop of 144 million tonnes, to 133.4 million tonnes, bringing the 2021/22 MY (Oct ’21-Sept ’22) Brazilian soyabean crop estimate to its lowest since the 2015/16 MY. According to market sources, rain and milder temperatures are necessary to prevent further soyabean production cuts.

Additionally, Argentina’s key soyabean region is expected to be hit by a heatwave, as well as little to no rainfall, which could put further pressure on Argentinean 2021/22 MY soyabean production. Although Argentina’s soyabean growing season is at early stages, market participants are predicting a smaller crop than USDA’s forecast. Consequently, with the reduced soyabean crop estimates and rising concerns about supplies of alternative vegetable oils (rapeseed and palm oil) due to the recent crude oil price rally, soyabean prices are likely to rise further in H1 2022.

Topics: Oils & Oilseeds
Roxanne Nikoro
Roxanne Nikoro

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