USDA Further Trims Brazil Corn and Soybean Production Forecasts

The USDA in its February WASDE report further trimmed its forecasts for Brazil corn and soybean production, as erratic weather since the start of the growing season has cut into yields. 

Despite the reduced outlook, the USDA estimates that Brazil’s corn and soybean harvests will be the country’s second highest ever, after last year’s records. The USDA’s estimates are in line with Gro’s own machine learning-based model predictions for Brazil corn and soybeans. 

The USDA forecast Brazil will produce 156 million tonnes of soybeans, down 0.6% from last month’s estimate. Corn is projected to be 124 million tonnes, down 2.4% from last month. 

South America production will affect US farmers’ spring planting decisions in the coming weeks. Early forecasts generated by Gro’s 2024 US Corn and US Soybean Planting Intentions Model show a large year-on-year increase in US acres planted to soybeans and a decline in corn acres. 

Brazilian production will help boost 2023/24 world ending stocks for corn to the third-highest level in history, while world soybean ending stocks will be the highest. Plentiful inventories have propelled futures prices for the two commodities to their lowest levels in at least three years.

The USDA left its Argentina production estimates unchanged at 55 million tonnes of corn and 50 million tonnes of soybeans. However, Gro expects the USDA will need to lower its Argentina forecasts. 

Gro’s Argentina Yield Forecast Models for corn and soybeans currently project yields well below the USDA’s estimates, as Gro wrote about here. Gro’s machine learning-based forecast models update on a daily basis — in contrast to the WASDE’s monthly estimates — providing actionable insights around questions of supply, demand, price movements, and trade flows. 

The USDA increased its forecasts for Ukraine exports of corn and wheat by 9.5% and 7.1%, respectively, from last month’s estimates. 

Ukraine grain loadings have accelerated over the past several weeks, reaching levels not seen since before the Russia-Ukraine war, as Gro highlighted here. Gro shipping data show a sharp jump in the number of dry bulk carriers loading at Odessa port starting in mid-November and continuing into the new year. 

The USDA also increased its forecast for US soybean ending stocks by 12.5% versus last month on lower exports. The reduction in US soybean exports is driven by the slow pace of shipments through January and strong competition from Brazil.