Observation on the Brazilian Soybean Crop – 01/07/2021

Dry weather in the Southern half of the Brazilian row crop area will likely result in a soybean crop smaller than the 144 million tonne (5.3 billion bushels) crop USDA forecast last month. We performed a what if analysis  and assumed the 2022  Brazilian soybean yield would fall one standard deviation and two standard deviations from trend. One standard deviation subtracted from trend yield would result in a 2022 Brazilian soybean crop of 136 million tonnes while two standard deviations would calculate a crop of 128 million tonnes. 

Because of the strong trend in Brazilian soybean production it is unusual for the final estimate to fall short of the  forecast made by USDA in December. And there have only been 4 years in the last 25 years in which the Brazilian soybean yield fell more than one standard deviation from trend  USDA will issue the next Brazilian soybean production estimate on January 12, 2022.