In W24 in the soybean landscape, the USDA expects Brazilian soybean production for the 2022/23 crop to reach 156 million mt, up 1% compared to the May estimate and up 20% compared to the 2021/22 harvest. The USDA also estimates the Brazilian soybean harvested area to reach 43.9 million ha, up by less than 1% compared to the May projection and 6% more than 2021/22. The Brazilian soybean yield is estimated at 3.55mt/ha, unchanged from the May estimate and up 13% YoY. The Brazilian soybean harvest nears completion with more than 99% harvested by the end of May. The USDA reports MoM soybean yield increases for the Midwest states, with the biggest gains in the states of Mato Grosso and Mato Grosso do Sul. FAMASUL reports an increase of 1.6 million mt in soybean production compared to the initial estimate. The 2022/23 Brazilian soybean bumper crop is attributed to several factors including improved seed varieties, best crop management practices, and exceptionally favorable weather conditions in almost all regions. IMEA indicates that the 2022/23 Mato Grosso soy crop sale in Brazil reached 72.09% of the already harvested crop, up about 6 percetage points compared to the May survey, but behind the 5-year average of 85.43%. IMEA also reports that the expected sale of the 2023/24 soybean crop, anticipated to be planted from mid-Sep-2023, reached 12.09% of the total forecast, up compared to the May estimate of 9.35% but below 27.86% on average.
Soybean marketing in the 2022/23 Brazilian harvest is losing strength, with a slower pace recorded throughout May-2023 and the first days of June-2023 compared to the advance observed in April-2023. Brazilian soybean producers are struggling due to falling prices in Brazil, resulting in a slowdown in negotiations. According to SAFRAS and Mercado, the need to obtain financial resources and free up storage space for the second-crop corn harvest in the Midwest and Southeast regions contributed to the slowdown. In addition, soybean export premiums continue to be pressured downwards by the large domestic supply, and the recent fall in futures contracts in Chicago, due to the prospect of a super harvest in the US, increased downward pressure on Brazilian prices, resulting in an unfavorable month for the market of soybeans in May-2023. It’s noteworthy that there is still a considerable supply of soybeans in Brazil, and the delay in the disposal of this overproduction could disadvantage producers in the coming months, even if there is an expectation of recovery in prices in the second half of 2023.
The Buenos Aires Grain Exchange estimates the 2022/23 Argentine soybean production to reach 22 million mt, unchanged from the previous estimate. In W23, the average Argentine soybean yield stood at 1,500kg/ha, unchanged from W22’s projection. With only 13% of the soybean harvest left in Argentina, the soybean yield and production estimate are expected to remain relatively steady. As of late W23, Argentine soybean harvesting reached 87%, up 8.7% WoW but down compared to 97% in the same period in 2022 and 96% on average. The soybean harvest is wrapping up in central Argentina, while in southern and far northern Argentina, harvesting has reached 60-70%. The 2022/23 soybean crop in Argentina was rated 40% poor/very poor, 42% fair, and 18% good/excellent as of late W23. The good/excellent percentage was up 13% WoW since only the better-quality soybeans are left to harvest.
The USDA informs that US soybean planting reached 96% of the planned area, up 5% WoW and 9% YoY, and above 86% on average. Also, 86% of US soybean fields have already germinated, above 74% in W23, 68% in the same period in 2022, and 70% on average. The USDA indicates that 59% of US soybeans are in good or excellent condition, slightly below the market expectation of 60%, while 32% are in fair condition, and 7% are in poor or very poor condition. Furthermore, the USDA reports that US soybean export inspections were pegged at 140.18 thousand mt, a decline of 82.13 thousand mt WoW, and 468.79 thousand mt YoY, with shipments mainly destined for Italy and Mexico. So far in the 2022/23 season, US soybean export inspections reached 48.834 million mt, down compared to 50.53 million mt in the same period in 2022. Lastly, NOPA reports that the pace of US soybean processing in May-2023 slowed for the second consecutive month as some crushers shut down their facilities for maintenance. However, US soybean monthly production is expected to be the highest recorded in May. NOPA indicates that US soybean crushing in May-2023 reached 175.88 million bushels, with a daily crush rate of 5.674 million bushels per day, down from 5.774 million bushels per day in Apr-2023 and the lowest daily rate since Sep-2022.
