Hopes for Brazil’s 2022-23 soybean crop took a, rare, step backwards as dryness trimmed expectations for production in Mato Grosso, the top producing state.

Imea, the state research institute, downgraded by 355,000 tonnes, to 41.46m tonnes, its forecast for the state’s soybean harvest, as will start late this month.

The reduction reflected a small cut to the yield estimate, after rainfall in the past month proved “poorly distributed, and with volumes below historically observed in some locations in the state”.

This prompted a “decrease in soil moisture and increased plant stress”, Imea said, adding that some area “had no rain for more than 10 days”.

Corn implications

Nonetheless, the institute reported a benign weather outlook, saying that the seven-day forecast from the US NOAA weather agency “indicates 55mm-65mm of rainfall in most of the state, which may reduce the water stress in these areas”.

The harvest forecast of 41.46m tonnes also remained a record top, more than 600,000 tonnes above last year’s high. Most estimates for Brazil’s overall soybean harvest are pitched above 150m tonnes, which would be by a distance an all-time high.

Furthermore, Imea noted a benefit from some dryness, in terms of enabling a speedy harvest which, after timely soybean sowings too, meant that farmers would be able to sow nearly all their follow-on safrinha corn crop before a late-February deadline, after which yield prospects decrease.

“With the completion of soy sowing in the state on December 2…. it is projected that 98.8% of corn areas will be sown within the ideal planting window in Mato Grosso, which is considered until the last week of February,” Imea said.

Later-seeded crops are viewed as having a lesser chance of establishing well before seasonally drier and hotter weather kicks in.

‘High price levels’

Imea held at a record 46.41m tonnes its forecast Mato Grosso corn production in 2022-23, factoring in an expectation of sowings expansion of 270,000 hectares, to 7.42m hectares, also an all-time high.

The sowings forecast factored in expectations that disappointing harvests in Argentina, Europe and the US “supply will continue to stimulate high [corn] price levels in international market and encourage producers to increase area.

Furthermore, the onset of Brazilian corn exports to China, under a revised phytosanitary deal, “may keep demand for the cereal from Mato Grosso heated and consequently encourage an increase in area, since Mato Grosso is the largest exporter”.