S. Am. Grain Production update (Nov 2023)
South American Grain Production as of November 28, 2023.
Here are updated corn and wheat numbers for South America. Please take with the caveat that it is still very early for Brazil and Argentina for different reasons. Brazil’s second-season corn is at significant risk of widespread areas going unplanted. Argentina’s elections pushed back decision-making and payments for the input industry. Both have impacts, and the models will better reflect this as we approach the more critical growing periods.
Corn
Easy Newz estimates South American production at 177.37, a decline of 22 million or 11% from our initial estimates. USDA projects 14 million tonnes higher at 191, on par with 2022/23.
Brazil 113.41 (USDA 129), Argentina 56.1 (USDA 55), Paraguay 5.55 (USDA 5.1), Bolivia 1.05 (USDA 1.125) and Uruguay 1.26 (USDA 1)
Wheat
Easy Newz estimates South American wheat production at 26.41, a decline of 3.32 million or 11.2% from our initial estimates. USDA is at 26.85, not including FAS revisions, or 1.5% above Easy Newz.
Brazil 9.69 (USDA 9.4), Argentina 15.07 (USDA 15), Paraguay .976 (USDA 1.1), Bolivia .306 (USDA .3) and Uruguay .967 (USDA 1.05)
Other Grain Comments
Sorghum prices in Argentina offer better potential risk-adjusted returns in peripheral areas. There is upside potential, similar to our barley figures.
Cotton is going to gain acres in center-west and northern Brazil. It is a better crop for the heat. How many soybean acres and Safrina corn acres will be lost is unclear.
Rice is gaining acres across Brazil and in northern Argentina. Areas like Corrientes are replenishing reservoirs and retaining ponds after drying out during the previous two El Niño campaigns. Water levels were reduced 95% to 100%.
*FAS sent updates for grains in Brazil (11/6) and Argentina (10/30). There were reductions in corn and wheat production. The latest WASDE did not reflect these.
Easy Newz Comments:
Brazil’s corn crop is the wild card. There are three trends currently hurting the production outlook.
2023/24 is the first year since 2016/17 that total planted acreage will decline nationally.
Profit margins are near break-even in many states. Farmers will be much less likely to push planting windows at current price levels.
Safra corn in the south and dry weather in the north will leave widespread areas unseeded. Safrina is a significant wildcard. Hot weather (ideally with close to normal rains) and rapid development are needed to ensure farmers have the best opportunity to plant in the second season.
Wheat expectations should stabilize as recent reports in Argentina indicate the sub 13 mmt production now appears unlikely. This is good news for farmers still suffering from last year’s drought, but 2024 prices are unattractive today.
If the USA is going to have a chance to be competitive in shipping corn to China and other Asian destinations, these weather trends need to stay in place. Brazil’s domestic ethanol and feed industries are booming. Production losses will limit exports.
Few social media accounts could label the states of Brazil, even fewer know where the crops are grown, and even fewer work with large datasets. Photos of maps and dying crops are not reasons to make serious decisions.
Easy Newz Disclaimer
It is early, and we recognize this. An early anchor to start each crop campaign can be an edge for managing risks, thinking about rotations, and positioning assets. We hope you find it helpful.
An excellent way to understand crop development and trends is to compare to USDA figures. Since Easy Newz will provide forward forecasts and update regularly, the trend versus the USDA will give an idea of how the weather impacts other regions and countries.
Please reach out for questions on the outputs or to use information from Easy Newz. It is free!
