South American Soybean Production – 12/13/2022

The outlook for a huge increase in South American soybean production is the major bearish force in the soybean complex futures market. We have charted the  USDA’s December 2022 forecast for the 2022/2023  South American season. Important points include …

…The expected South American soybean crop is much larger than the US crop  making  weather conditions through the remainder of the growing season (through early March) a major force in the soybean futures market.

… USDA’s Brazilian forecast is on the optimistic side and the crop could be much smaller  if unfavorable weather should prevail during the remainder of the season.

..South American soybean yields are somewhat dependent on the *ENSO cycle. The current La Nino phase of the cycle is sometimes, but not always,  accompanied by drought conditions, especially in Brazil. 

…As of mid December the soybean crop in Argentina is  in average condition at best and average condition in Brazil.. 

The El Niño-Southern Oscillation (*ENSO) is a recurring climate pattern involving changes in the temperature of waters in the central and eastern tropical Pacific Ocean.

 Seasonal analysis suggests a January May range of $14 to $17  basis the May soybean  contract. Significant Southern Hemisphere crop problems would likely be required to push May soybeans  to the upper end of the projected seasonal range.