The USDA’s recent report indicates that Brazil is expected to achieve a historical high in soybean production, reaching 162 million tonnes during the 2023/24 marketing year. This projection represents a 4.5% increase compared to the previous year when the output was 159 million tonnes. Despite the fact that soybean prices in Brazil are currently at their lowest levels since before the pandemic, farmers are still expanding their planting areas. This expansion is primarily due to farmers shifting from planting first-season corn to soybeans, as corn prices are also low but less favorable compared to soybeans.
The increased pace of planting can be attributed to more favorable weather conditions in September this year compared to previous years. The planted area is expected to rise to 45.4 million hectares in the 2023/24 season, up from 43.8 million hectares in 2022/23, as reported on October 11th.
For the first time in several years, the USDA anticipates a decrease in the cost of production for soybean farmers in Brazil. Additionally, Brazil is poised to have another remarkable year for soybean exports, with estimated shipments reaching 100.2 million tonnes, surpassing the estimated 99 million tonnes for 2022/23. This optimistic forecast is based on the anticipation of ample supplies and a highly advantageous exchange rate.
Between February and August 2023, Brazil exported 80 million tonnes of soybeans, a significant increase compared to the 64 million tonnes during the same period the previous year. This surge is attributed to record production, reduced production in Argentina, and sustained demand from China.
It’s worth noting that soybeans are the primary crop produced in Brazil, which is the world’s leading producer and exporter of soybeans, with China being the primary destination for most of its shipments.