Feb 26 / Pedro Schicchi

Crop Forecast: Soy Brazil - 2024 02 26

Another month and further cuts were made to the Brazilian production of soybeans. This time, however, it seems like the changes are getting smaller on a month-over-month basis.

One important divergence remains in the market. While USDA maintains a high number 156M ton (-1M ton MoM), Conab has trimmed its estimates to 149.4M ton (-6M ton MoM), which is more in line with other players. Following these important reports, we aim to update our crop number and show a bit of what is behind it. Let us give you the good stuff first: hEDGEpoint’s February crop number is 150.1M ton, down from 153.4M ton January.

One of the reasons was further consolidation of losses due to a poor start to the crop. However, weather conditions were better in January, which helped to stanch the bleeding.

During last month’s revision, we were right at the “eye of the storm”. This time, though we are not out of the woods just yet, the number of fields that already reached maturity or harvested is much greater.

Still, there is a significant share of crops in the reproductive stages. This is especially true for producing states in the extremes (Rio Grande do Sul and MATOPIBA), which plant and harvest later than others.

The consequence is that, as less crops are “at risk”, the changes in new revisions of the crop numbers should start to diminish.

Climatic conditions in January represented an improvement over December in most regions, arguably helping to prevent further losses at the national level.

Temperatures were milder during the month, and precipitation was higher on average, though not in all regions.

As we move into February, precipitation remains favorable, though not everywhere. Amongst the two regions with the highest share of crops “at risk”, average rainfall levels through the month are better in MATOPIBA, vs Rio Grande do Sul. Hotter-than-normal temperatures continue to be the norm in this cycle.

On average, a soybean plant needs ~8 mm/day of rainfall to thrive in the reproductive stages of its development.

Finally, the last input considered in our models is the Normalized Difference Vegetation Index (NDVI). NDVI is used to quantify vegetation greenness and is useful in understanding vegetation density and assessing changes in plant health (USGS). Though not perfect, the measure has a good correlation with yields.

Several important blocs of states in Brazil, despite being worse than last year, have remained close to the 20Y average throughout the season. Examples are Mato Grosso, Goiás, Minas Gerais, and Mato Grosso do Sul, São Paulo, and Paraná. Of course, this is true in the aggregate, but may not be true when speaking of specific regions within these states.

The extremes (MATOPIBA and Rio Grande do Sul) had a very poor start to the season but recovered once we approached January and weather conditions improved.

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Crop Forecast: Soy Brazil - 2024 02 26

Brazil Soybeans - Crop Estimates Update

Right to the point

Brazil Soybean - Area, Yield and Production (M ha, ton/ha, M ton)

Phenology

Soybean Brazil - Phenology in Feb-18

Weather

Temperature Anomaly (°C from normal average)

Precipitation (mm/day on average)

NDVI

NDVI - Mato Grosso, Goiás, Minas Gerais

NDVI - Mato Grosso do Sul, São Paulo and Paraná

NDVI - MATOPIBA

NDVI - Santa Catarina, Rio Grande do Sul

In Summary

Weekly Report — Grains

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