January 10, 2020. Today, Indigo announced its initial South American Corn and Soybean Production Report for the the 2019/20 season, forecasting end of season production, yield, and planted area for Brazil and Argentina. Due to a weaker than average crop canopy, and uneven weather across both countries, Indigo’s forecast is slightly below expectations – with 12M fewer tons of corn and 19M fewer tons of soybeans than market consensus.
In Brazil, Indigo forecasts 95M tons of corn and 110M tons of soybean production, based on projected yields of 5.4 tons per hectare and 3.0 tons per hectare in combination with Conab’s area planted estimates of 17.5M hectares and 36.8M hectares, respectively. In Argentina, Indigo forecasts 42M tons of corn and 46M tons of soybean production, based on projected yields of 6.8 and 2.6 metric tons per hectare in combination with the USDA FAS’s area planted estimates of 6.1M hectares and 17.5M hectares, respectively.
Brazil improves after a slow start. The world’s third largest producer of corn and second largest producer of soybeans had a slow start to the growing season, with dry conditions prominent through the middle of October – the prime planting period. Sporadic and insufficient rainfall gave way to adequate precipitation; planting has now caught up to the five year average, raising crop health with it.
Today, In the state of Mato Grosso – which produces the most soybeans in the country – yields are in line with the three-year average. Other states in the northeast and south of Brazil are a bit lower, after experiencing the brunt of the drought.
Argentina, strong out the gate, starts to slow. At the same time, Argentina, the world’s fourth largest producer of corn and third largest producer of soybeans, had a solid start to the season, but dried out in November and December. Only in the past week has adequate rainfall resumed, reducing the dry areas within the country. This means early planted corn and soybeans could experience a dip in production, while later planted corn could see a small yield bump – if the beneficial rains are to continue. As crops absorb the additional moisture and improve in condition, yield forecasts are likely to also improve.
What can you expect? Indigo will continue updating its forecast as the season in South America progresses, returning on February 11th with another production report before the USDA’s monthly WASDE release.
Interested in learning more? Watch this webinar below.
Indigo's GeoInnovation team recently published a new report containing our unique perspective into agricultural production across Brazil and Argentina. This month, two of our resident GeoInnovation experts Matt Beckwith and Nicholas Malizia break down the contents of this report and the underlying Atlas technology behind it.
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