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Featured | Soybean crop in Rio Grande do Sul suffers another cut due to scarce and irregular rainfall

By: StoneX Intelligence Brazil, StoneX Intelligence Brazil

Soybean crop in Rio Grande do Sul suffers another cut due to scarce and irregular rainfall
 
Ana Luiza Lodi
 
João Pedro Lopes
 
WEATHER DISAPPOINTED IN THE FIRST HALF OF FEBRUARY, AND PROSPECTS FOR THE LAST TWO WEEKS OF THE MONTH ARE NOT GOOD

The soybean market is attentive to the South American weather in another year La Niña influence, with the lack of adequate rainfall in the south of the continent affecting the productive potential of grain crops. Argentina's soybean crop has suffered recurring cuts to its production outlook, with the Buenos Aires Exchange betting on 38 million tonnes and the Rosario Exchange expecting an even lower result, with its latest estimate at 34.5 million.

In Brazil, the crop in Rio Grande do Sul is a great concern. This state oscillates between the second and third positions in national production and has already shown significant losses due to the weather in the 21/22 cycle. For the 22/23 crop, soybean production in Rio Grande do Sul also moves towards a result below potential due to low precipitation volumes. Since October 2022, rainfall has been considerably below average in practically the entire state in the last four months.

Average rainfall in Rio Grande do Sul vs. 20 years

image 63749
Source: StoneX, with data provided by NASA (Global Precipitation Measurement / GPM), 2022 and 2023.

Accordingly, StoneX had already promoted two cuts in the production estimate of Rio Grande do Sul in its monthly updates, with the February report bringing 19 million tonnes.

However, to confirm this result, the rainfall in the first half of the month was fundamental. Nevertheless, it ended up disappointing, with regularity and good volumes failing in some areas of the state. In addition, the lack of moisture was further aggravated by high temperatures, increasing plant stress.

Given this scenario, StoneX promotes another cut in the state's production estimate to 16.06 million tonnes, 15.8% less than the one released at the beginning of February and 28.4% below the initially estimated potential. As a result, the state's estimated productivity fell to 2.43 tonnes per hectare (40.5 bags per hectare), highlighting those losses exceed 40% in some regions.
 

Evolution of soybean production in Rio Grande do Sul (MMT)

image 63655
Source: Conab and StoneX. Design: StoneX. *Estimate

It is also important to point out that further losses are not ruled out, depending on the weather in the last two weeks of this month. The forecasts for the period are not as optimistic, and the accumulated rainfall should not be very significant, opening the possibility of a new cut in the region's soybean crop in the StoneX estimates report to be released in early March.

Accumulated precipitation (mm)

image 63748
Source: StoneX, with data provided by NASA (Global Precipitation Measurement / GPM), 2023.

 

 

 
 
  • Grains & Oilseeds

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