Drought could Impact Brazilian Soybean Crop – 12/22/2021

Warmer and  drier than  normal weather is negatively impacting the  Brazilian soybean crop. Earlier this month the USDA maintained a trend yield forecast for the new Brazilian crop of 144 million tonnes or 3.56 tonnes per hectare. As a what if exercise we assumed an average yield of 3 tonnes per hectare close to that prevailed in the mid teens. The result would be the loss of 23 million tonnes or 840 million bushels of soybeans. The damage would be far greater than the USDA’s current 2021/2022 US soybean carryout forecast of 340 million bushels.