January 9, 2024

Argentina's bumper soybean crop expected to offset Brazil's decline

Recent forecasts from machine learning-based yield models by Gro Intelligence suggest that Argentina's soybean harvest is poised to counterbalance an anticipated decline in Brazil's production, offering relief to global supply concerns, Gro Intelligence reported.

Gro's Normalized Difference Vegetation Index (NDVI), a key indicator of crop health, revealed that Argentina's soybean-growing regions are experiencing near-historical highs. Benefiting from recent rains, partially influenced by El Niño, Gro's Climate Risk Navigator for Agriculture notes a reduction in the Gro Drought Index and an increase in soil moisture levels since mid-October.

Argentina's soybean yields are projected to surge significantly, reaching the highest levels in four years, according to Gro's Argentina Soybean Yield Forecast Model. Argentina holds the title of the world's largest exporter of soybean oil and soybean meal.

Previous El Niño years, such as 2019 and 2015, have historically led to higher soybean and corn yields in Argentina compared to La Niña years. The 2022/23 crop year, marked by La Niña, resulted in drought conditions, causing a 43% year-on-year decline in soybean production and a 31% decrease in corn production.

The persistence of El Niño conditions until at least May is anticipated, presenting favourable conditions for Argentina's crops. Gro's medium- to long-term weather forecasts indicate continued conducive growing conditions from January through the harvest season, starting in late March for soybeans and extending through June for corn. However, it's crucial to note the inherent uncertainty in forecasts made several months in advance.

In contrast, Brazil's soybean crop has faced challenges due to erratic rainfall, likely exacerbated by El Niño, as previously highlighted by Gro. While Gro's Brazil Soybean Yield Forecast Model currently predicts a drop in yields compared to the previous year, the potential for recovery remains if conditions improve.

Gro's comprehensive Brazil Soybean Monitor and Argentina Soybean Monitor integrate machine learning-based yield forecast models with insights into growing conditions and supply and demand balance sheets. In 2023, Gro's Brazil soybean model demonstrated 98% accuracy six months before Brazil's government released its final figures, and the Argentina soybean model forecast was within 94% of Argentina's Ministry of Agriculture's final numbers more than five months before publication.

-      Gro Intelligence