Fundamentally Speaking

Despite the early season woes in Brazil and the quite favorable situation in Argentina, the USDA is normally quite slow to make revisions in its estimates of South American soybean production, especially this early in the season, and maintained its 48 million and 163 million estimates for the 2023/24 season for Argentina and Brazilian soybean crops, respectively.

The USDA started issuing its estimates for the 2023/24 U.S. and global soybean balance sheets back in May and has kept its production figures unchanged through November, though it will be interesting to see where we end up.

Along these lines, this chart shows the percent change in the USDA's soybean production forecasts for Argentina, Brazil and the combined figure from the first WASDE estimate to the one a year later. The data is reported back to the 2000/01 season and should note that from 2000 to 2004, the first new crop WASDE report was issued in July. From 2005 to 2008, it was released in June, and starting in 2009 through the present, it has been first released in May.

One thing you can say for sure is Argentina has had a string of bad luck as only twice since the 2006/07 season has the USDA increased its estimate of Argentine soybean production from its first WASDE projection to its estimate one year later. It actually has been nine years since this last happened, and for the past four seasons, the USDA Argentine crop estimate has gotten worse as the season progressed, culminating in last year's final crop estimate of 27 million tons, down a huge 47.1% from the first WASDE projection of the 2022/23 crop given in May 2022.

Brazil has fared better but not enough to keep the USDA from not increasing its combined Argentine and Brazilian soybean output projection from the first WASDE to the one a year later since the 2016/17 season.

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