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In-Depth Look at South American Soybean Prospects

By Rob Hatchett
As the calendar turns to 2020, so too has the market’s supply focus swung from the recent U.S. harvest towards the prospects for the upcoming South American soybean crops. In this article, we will take an in-depth look at the latest planting progress, crop conditions and production ideas, along with a look at two key features that are expected to determine the desirability of soybean supplies in key exporters of Brazil and Argentina.
To refresh readers, the beginning of September typically marks the start of the earliest soybean plantings for farmers in South America. In Brazil, farmers must wait at least sixty days between the harvest of one soybean crop and the planting of another. This industry standard rule is intended to prevent the spread of fungal diseases, such as soybean rust, which can spread from one crop to the next. That period is dependent on the region and for this year, the starting date in Parana was September 11 while Mato Grosso farmers could begin seeding on September 15. Argentine soybean farmers must wait longer to begin seeding soybean fields and have traditionally begun seeding their crops in earnest beginning in November as the sun continues drifting further into the southern hemisphere, bringing with it longer and warmer days.
It is helpful to be reminded as to where key South American soybean production areas lie. The following maps show the dispersion of soybean production in Brazil and Argentina, along with each country’s major states’ percentage of output between 2014-16. One can see from the first map that the greatest portion of Brazil’s soybeans are grown in the center-west region, which includes nearly 30% of overall output in Mato Grosso. In general, production shifts to the southeast into Goias and Mato Grosso do Sul along with the far southern states of Parana and Rio Grande do Sul. The second map focuses on central and northern Argentina, where the nation’s soybeans are grown. Looking at Argentina’s recent soybean production output by soybean-producing district, Buenos Aires is the largest at just over one-third of the 2014-16 output, followed by Cordoba (28%), Santa Fe (13%), and Santiago Del Esterio (5%).
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