4. Potential Growth in Brazilian Soybean Production in 2025

It is possible that China in 2025 and beyond will be able to source nearly all of its soybean from Brazil. In 2023, soybean production in Brazil was negatively impacted by heat and dryness in November and December. This is common when El Niño is present. However, if Brazil avoids major weather issues between November and January 2024/25, a massive crop could occur. 

Brazil is one of the few countries that has arable land not currently being farmed. The USDA in its May report forecast Brazilian soybean production in 2024/25 at a record 169 million tons, which would expand Brazil’s share of the world soybean trade and roughly match China’s import needs.

brazil soy production

5. La Niña and Argentina

While Brazil seems set to play an important role in the world soybean trade beginning in early 2025, soy product supply and demand is less certain due to the current transition from El Niño to La Niña. Long term forecasts no longer project an intense and lasting La Niña event, but it is highly probable that La Niña will be present this autumn and winter. La Niña often produces drought in Argentina, with the soybean yield in Argentina below trend in each of the last eight La Niña winters. 

argentine soy yield

It is possible that gains in Brazilian soybean production will offset potential losses in Argentina, but drought in Argentina would complicate the movement of soybean oil and soybean meal. Argentina is the world’s largest exporter of soybean meal and soybean oil and accounts for 30%-40% of global soybean meal trade. Not all can import and crush soybeans, so there is a scenario in which U.S. soybean export demand could be weak, but demand for U.S. soybean meal stays strong. 

Overall, the two most significant determinants of agricultural commodity prices are weather and government policy. AgResource research suggests that rallies in the soy complex will struggle without adverse weather – mostly due to the relationship between the U.S. and China – but only in August will the world know with confidence Northern Hemisphere oilseed yields and production. 


 

 

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