Brazil plans to increase soybean planting area in the 2022/23 season

Brazil is the world's main producer of soybeans, growing 125-138 million tons of beans annually, most of which is exported to China. For the 16th year in a row, the country is increasing the area of soybean sowing, in particular for the 2022/23 harvest.

According to DATAGRO Consulting estimates, in FY 2022/23 soybean sowing area will grow by 3% compared to FY 2021/22 from 41.79 to 43.02 million hectares, thanks to which soybean production will increase from this year's 126.58 to 151.82 million t. The expansion of the soybean sowing area is due to a 2% reduction in the first-harvest corn sowing area due to an increase in production costs for its cultivation.

At the same time, the area under second-crop corn, which is sown after harvesting soybeans, is expected to grow by 4% to 18.65 million hectares, thanks to which the country will harvest 94.63 million tons of saffron corn in the summer of 2023, which will exceed this year's figure by 2% . The total production of corn (both crops) in FY 2022/23 will reach 120.48 million tons, which will be 3% higher than the record 117.42 million tons harvested in FY 2021/22.

According to the General Statistics Office, in July, compared to June, China reduced soybean imports by 4.5% to 7.88 million tons, which is 9.1% lower than in July 2021. The reduction in purchases is due to a low margin of soybean processing and weak demand for processing products, as lockdowns due to covid-19 continue in the country's major cities. In 7 months of 2022, China imported 54.17 million tons of soybeans, which is 5.9% less than in the same period of 2021.

Weather conditions favor the sowing of soybeans in Brazil, so China in September - October, in anticipation of high-quality and cheap Brazilian soybeans, may reduce purchases of expensive American soybeans, which will lead to a drop in prices on the Chicago exchange.

November soybean futures in Chicago last week remained at $510/t, the same as a month ago, but favorable weather for the development of crops in the US and forecasts of a record soybean harvest in Brazil as early as late August or September will increase the pressure on quotations.