Soybean production in Argentina and Brazil is expected to falter in the new 2015/2016 marketing year after a bumper harvest the previous year, according to fresh unofficial updates from USDA. The two countries combined are expected to produce 154mn t of beans in 2015/2016, down from a combined total of 156.8mn t in the 2014/2015 marketing year.
Brazil’s soybean crop is still tipped to hit a record 97mn t in the new marketing year, with the weak Brazlian Real keeping prices relatively strong in the domestic market despite price weakness in the international dollar-denominated markets and encouraging soybean farmers to slightly increase their footprint.
Brazilian soybean hectareage is now expected to hit 32.6mn ha, up from 32mn ha in the 2014/2015 marketing year, with the “aggressive” land expansion of recent years a thing of the past thanks to economic and political uncertainties in Brazil, USDA said. B7 biodiesel demand is expected to be the main driver behind a rise in domestic soybean consumption to 43.15mn t, up from 42.77mn t in 2014/2015, with Brazil’s poor economic prospects weighing on feed demand. Chinese demand meanwhile should keep next year’s exports at 53.5mn t, up from 51mn t in 2014/2015.
Argentina’s soybean production is forecast to drop from 60.8mn t in 2014/2015to 57mn t next year as Argentina’s strong currency, poor economy and uncertain political environment depress activity. The results of October 25th’s presidential election will be key to steering farmers intentions going forward amid an expectation that a change in government could reduce the high domestic and export taxes which Argentinian farmers currently have to labour under.
MS – 08/10/2015