Weekly Product Updates

W7 Soybean Update: Brazilian Soybean Harvest Accelerates Amid Regional Challenges, Paraguay’s Exports Surged Dramatically in Jan-24

Published Feb 23, 2024
In W7 in the soybean landscape, Brazil's 2023/24 soybean harvest has reached 23% of the cultivated area as of February 8, showing a 7% increase in WoW and surpassing the same period in 2022. While Mato Grosso has harvested over half of its area and Matopiba shows promising productivity, concerns arise in southern regions like Paraná and Rio Grande do Sul, where adverse weather conditions have led to significant losses. In Paraná, 25% of soybeans have been harvested, with production estimated at 19.2 mmt, down 14% YoY. Despite these challenges, Brazilian soybean exports surged in Jan-24, with Paraguay also experiencing remarkable increases in foreign currency earnings and export volume.

Brazil's 2023/24 Soybean Harvest 23% Completed Amidst Regional Challenges

In Brazil's 2023/24 soybean harvest, 23% of the cultivated area has been harvested as of February 8, marking a 7% increase week-on-week (WoW) and exceeds the 17% harvested during the same period in 2022. It is the second-highest level recorded for this time of year, only behind the 26% in the 2018/19 harvest. While Mato Grosso has already harvested over half of its area and Matopiba shows promising productivity, attention is on the southern regions. Paraná has experienced significant losses due to hot and dry weather since Jan-24, and concerns persist in Rio Grande do Sul, where producers hope for more rain and cooler temperatures to ensure a successful harvest.

Paraná's Soybean Harvest Accelerates to 25% Amidst Weather Challenges

Farmers in Paraná, Southern Brazil, have harvested 25% of their 2023/24 soybeans, marking a significant acceleration compared to last year's 2%. This rapid pace is due to hot and dry weather in Dec-23 and early Jan-24, which shortened the soybean growth cycle. The Department of Rural Economics (Deral) estimates soybean production in Paraná at 19.2 million metric tons (mmt), down 14% year-on-year (YoY) due to adverse weather conditions. As soybean harvesting progresses, farmers are planting their safrinha corn, with 32% already planted, indicating a swift pace compared to previous years.

Brazil's Jan-24 Soybean Exports Surge, but Analysts Warned of China Slowdown

Soybean exports from Brazil surged to 2.3 mmt in Jan-24, a significant increase compared to 944.3 thousand metric tons (mt) in the same period last year, with approximately 75% of this volume destined for China. However, analysts anticipate a slowdown in China's oilseed purchases in the coming months, reflecting a downward trend in demand. Additionally, Brazilian soybean meal exports saw a substantial increase of 22.7% YoY in Jan-24, totaling 1.75 mmt. Looking ahead to Feb-24, National Cereal Exporters Association (ANEC) forecasts indicate a slowdown in soybean and corn exports compared to the Feb-23 period. Soybean supplies are expected to reach 7.3 mmt, down from 7.5 mmt in Feb-23.

US Soybean Acreage Grew Modestly Compared to Brazil's Expansion

The soybean area in the United States (US) in the 2023/24 season is projected to reach 35.41 million hectares (ha), marking a 4.7% YoY increase from the previous season. A comparison with Brazil reveals that the increase in US soybean acreage is less impressive than Brazil's growth from 33.90 million ha in 2016/17 to 35.15 million ha in the 2017/18 harvest, representing a 3.5% increase. This difference in performance is attributed partly to adverse weather conditions. Notably, despite having 300 thousand ha less than the current North American area, Brazil harvested 123.2 mmt of soybeans in the 2017/18 season.

Paraguay's Jan-24 Soybean Exports Skyrocketed in Earnings and Volume

Soybean exports from Paraguay in Jan-24 surged remarkably in foreign currency earnings and volume. According to the Central Bank of Paraguay (BCP), foreign exchange income reached USD 279.2 million, marking a staggering increase of 1,429.9% YoY compared to USD 18.2 million in Jan-23. Similarly, the volume of soybeans exported saw a significant rise of 1,987.8% YoY, with 687.49 thousand tons shipped compared to 32.92 thousand tons in the previous period. This surge is due to improved harvest conditions compared to the previous year, which saw delays due to the 2022/23 campaign's harvest and issues related to tolls imposed by Argentina on waterway routes.

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