Brazil has begun harvesting a record soybean crop that will have a major impact on global markets

AgRural experts report that Brazil has begun harvesting soybeans, which as of January 5 threshed 0.04% of the planned area, down from last year's 0.2% due to excessive soil moisture. Ahead of the release of the new report, the USDA representative in Brazil raised the country's 2022/23 soybean production forecast to 153 million tons, compared to 152 million tons in the December report. In December, AgRural experts estimated it at a record 153.6 million tons compared to 127 million tons last year.

The Brazilian Exporters Association Anec predicts that in 2023, Brazil will export a record 90 million tons of soybeans (79.14 million tons in FY2021/22), and corn shipments will significantly exceed last year's record of 43.17 million tons. In January, China contracted more than 1 million tons of corn from Brazil, as a result of which Anec experts increased the export forecast for January by 0.698 million tons to a record 5.024 million tons. A sharp increase in shipments of Brazilian soybeans and corn to China could significantly change global trade flows and reduce the volume of deliveries from Argentina and the United States.

According to the agency SAFRAS & Mercado, as of January 9, forward soybean sales of the 2022/23 MY crop in Brazil amounted to only 28.5% of the forecasted production, while last year they reached 36.5%. This is due to a decrease in global demand against the background of economic recession, primarily in China, which is the main importer of Brazilian agricultural products.

Traders are currently focused on the USDA's outlook for soybean and corn harvests in Argentina, where dry spells are still lingering after good rains, as well as estimates of China's soybean imports and consumption.