El Nino Impact on Brazil Soybean Production
The 2023-2024 El Niño Southern Oscillation (ENSO) is currently in a weak phase . However, the US National Weather Service has published an update suggesting there is a 60% chance of El Niño developing by the end of the year. If El Niño does develop, it is likely to be moderate (80%+chance) or strong (56%+chance).
El Niño is a climate pattern that occurs in the Pacific Ocean every few years. It can cause changes in weather patterns around the world, including changes in rainfall, temperature, and sea level.
Our interest is the impact at least a moderate El Nino would have on Brazil’s soybean areas. The accompanying chart displays Brazil’s national average soybean yield (USDA data) for the past 25+ years with moderate or strong El Nino years marked with a red year label. Note there is not much doubt El Nino has been a positive barometer for Brazilian soybean yields.
Brazil is now the World’s leading soybean producer, having surpassed the US several years ago.