Rains in South America improve crop prospects, but experts cut production forecasts

The rains in Argentina, Brazil and Australia started too late, so despite the improvement in the condition of the crops, it will not be possible to achieve the previous optimistic production forecasts.

Rainfall is still below normal in central Brazil , but there are scattered showers across the region, enough to support soybean and corn crops. In the southern states, there is an excess of precipitation, which does not contribute to the development of crops. Next week, the intensity of rains will decrease in the south and center of the country, which will delay sowing in the central regions.

The agency Conab reduced the forecast for the soybean harvest in Brazil by 1.4% to 160.2 (158 last year) million tons, and corn - by 0.5% to 118.5 (137) million tons, while the USDA estimates them at 163 and 129 million tons, respectively.

Scattered rains will continue in Argentina next week, favorable for the completion of planting and the development of soybean and corn crops. The experts of Refinitiv Commodities Research reduced the corn production forecast in 2023/24 MR by 3% compared to previous estimates to 51.9 (34 last year) million tons, which are planned to be harvested from 8.2 million hectares. While the USDA estimates corn production at 55 million tons, the improvement in weather conditions in the provinces of Buenos Aires, Santa Fe and Entre Rios did not compensate for the negative effects of bad weather in other regions, particularly in the province of Córdoba. Therefore, the forecast for soybean production in Argentina in 2023/24 MR is also reduced by 4% to 46.5 (25) million tons, which will be harvested from 16.9 million hectares, and the forecast for the wheat harvest is left at the level of 14.8 (12.6 ) million tons. It will be recalled that the USDA estimates soybean production at 48 million tons.

Above-normal temperatures persist in the Midwest and Plains of the United States with periodic precipitation favorable for the development of winter crops. Temperatures will rise further next week and remain high through the end of the month, which will reduce oil and gas consumption and therefore oil prices.

In Europe, heavy rainfall, particularly in the southern regions, improves the condition of winter wheat, rapeseed and barley crops.

In Australia, rainfall was 38% above normal in November, which sharply worsened the quality of the wheat crop, although it improved the condition of other crops.