Record South American Soybean Forecast Faces Weather Challenges

Production estimates were placed at record levels for Brazil and Argentina’s winter soybean crops ahead of the 2024/2025 growing season. In December, a report from the U.S. Department of Agriculture (USDA)’s Foreign Agricultural Service (FAS) predicted a soybean output of 169 million metric tons (mmt) for Brazil, a 10.4 percentage point increase in forecast from 2023/2024. Argentina’s predicted output was up to 52 mmt — a jump of 7.86 percentage points from the 2023/2024 forecast.

Since the report came out Dec. 10, the condition of each country’s crops have been clouded by shifting weather.

Dry Heat in Argentina

Dry conditions in northern Argentina have been consistent throughout the month of December, with maps from the National Weather Service’s Climate Prediction Center (CPC) showing the area to have received only between 50%–80% of its normal rainfall. Argentina is expected to surpass the output of the 2023/2024 growing season, in which consistent drought conditions caused extensive crop damage, but many of the country’s agricultural areas are still running behind average precipitation levels.

According to AccuWeather meteorologist Jason Nicholls, this dry and warm pattern of weather in Argentina is likely to continue through most of January. He said there is a chance of wet weather emerging later in the month, and added that the conditions will have a mixed impact on the country’s crops.

“The dry and hot weather can stress silking to filling corn and blooming cotton, especially if it lingers longer,” Nicholls said. “On the flip side, the dry weather in Argentina is good for winter wheat harvesting efforts.”

Wet Season Begins in Brazil

For most of the early planting season, weather in Brazil has been drier than the norm. December saw much of southern Brazil nearing 80% of its average rainfall, with only small pockets receiving surplus precipitation, according to the CPC. However, the rainfall from the final two weeks of 2024 is expected to continue in the month of January. In Mato Grosso, the country’s foremost agricultural state, the seven-day forecast calls for rain through Jan. 8.

This shift coincides with the beginning of Brazil’s wet season, Nicholls said, which normally runs through April. 

Nicholls called this weather swing “common” and said the early dry weather would have been conducive to planting — but those who were behind on planting could have been impacted by the recent rainfall. For the crops already in the ground, a wet January could be a boost, Nicholls said.

“The wet weather can be beneficial as crops like corn, soybeans, and cotton move toward the reproductive phases in January,” Nicholls said.

Looking Ahead

The dry conditions to this point in Argentina and southeastern Brazil has “tempered optimism” in markets about South American corn and soybean supply, a market report from Reuters said early Friday. This comes less than a day after the ag consultancy firm StoneX bumped their forecast for Brazil’s record soybean crop to 171.4 million metric tons, above USDA’s December numbers. 

Nicholls shared some concern about the stress crops in already dry areas might take in the coming months if precipitation levels don’t rise.

“Dryness in Argentina and far southeast Brazil over the next few months can stress corn and soybeans during their reproductive stages, which can reduce crop yields,” Nicholls said. The growing season could turn out drier and warmer for Argentina.

Brazilian states Rio Grande Do Sul and Santa Catarina might face drier growing seasons, while there is a chance for the more northern states of São Paulo and Mato Grosso to surpass rainfall levels from 2023/2024.

However, Nicholls said dry weather could still return in February to impact yields in those regions.