With the odds of La Niña sticking around through November at 91% and through March at 54%, the likelihood that Brazil’s upcoming soybean crop will be able to replenish global stocks has become more uncertain. As Brazil is the world’s largest soybean producer and exporter, its crop’s success drives global oilseed prices and influences US farmers’ planting intentions.
If a La Niña weather pattern holds, it will be the third consecutive La Niña-impacted soybean crop year in South America. In Argentina and certain parts of Brazil, La Niñas tend to bring hot and dry conditions that can drag down agricultural yields, resulting in inventory drawdowns.
This is important because the global soybean stocks-to-use ratio is currently at its second lowest level in six years. Additionally, this year’s US soybean crop, which is being harvested now, is projected to come in lower than last year, according to Gro’s US Soybean Yield Forecast Model.
With much of the projected uptick in the global soybean stocks-to-use ratio in 2022/2023 predicated on Brazil’s upcoming crop, a La Niña-disrupted growing season that leads to lower yields in Brazil could derail global soybean supply projections, delivering yet another year of tight soybean supplies worldwide.
So far, Brazil’s crop is off to a good start, with widespread rain available for planting, especially in southern Brazil the next seven days.
Generally, in Brazil, La Niñas tend to bring increased rain across the north and decreased rain in the south. During last year’s La Niña, southern Brazil went into a deep drought, as seen in Gro’s Drought Index.
Last year, dry conditions in Brazil’s southern states of Rio Grande do Sul, Paraná, and Mato Grosso do Sul, which represented 38% of the country’s soybean production in 2021/22, pushed soybean yields 30-55% lower than 2021/2020 levels. On the plus side, Mato Grosso – the largest Brazilian soybean producer – and other states in the north, such as Goias and Minas Gerais, posted record-breaking yields last year. Overall, however, Brazil’s soybean yield fell 14% last year compared with 2020/2021, also a La Niña-impacted crop year.
In Brazil, soybean yields during La Niña years can vary considerably because of the country’s vast climate differences and its dispersed acreage.
As Brazil’s soybean growing season progresses, Gro users can track weather and climate indicators for soil moisture, precipitation, and temperature using the Climate Risk Navigator for Agriculture. Also, every year in mid-December, Gro’s Brazil Yield Forecast Model, which updates daily, starts producing district-level yield estimates for Brazil’s main soybean-producing areas.