Today, Indigo is releasing a trend report for corn and soybean production in Brazil and Argentina, inclusive of total production, yield, and area planted estimates for the two countries. This is a pre-season estimate, which does not yet include live satellite observations.
How does this compare to the past? Compared to last year’s end of season harvests, Indigo’s pre-season projections for total production across Argentina and Brazil are down 5% for corn and 1% for soybeans. This in part is due to Argentina’s bumper crops last year - trends are reverting back to the recent historical mean.
In Brazil, Indigo’s pre-season trend projects 3.7B bushels of corn and 4.4B bushels of soybean production for 2019. This comes from a corn yield of an 85.5 bu/ac on the 43.3M planted acre estimated by Conab, Brazil’s national supply company. Pre-season soybean yields are 48.2 bu/ac yield on 90.7M planted acres estimated by Conab. Brazilian corn yields and production include both the early corn and second, safrinha, corn crops. Rain and adequate moisture are in the forecast for this upcoming week, which should help crops in the ground.
In Argentina, Indigo’s production trend projects 1.7B bushels of corn and 1.8B bushels of soybean production for 2019. For corn, this comes from a trend estimate of 110.4 bu/ac on 15.1M planted acres as estimated by the USDA’s FAS. For soybeans 42.2 bu/ac is combined with FAS’ estimate of 43.2M acres planted.
Why are we looking at trend? Trend is the starting place for our yield models. Atlas arrives at these estimates by looking at historical changes in productivity resulting from technological and other management improvements. Normal growing conditions, such as adequate heat and rainfall, are assumed.
Once the season is underway, trend is a metric we can compare our progress to – i.e., are we ahead of or behind where we thought we would be? Atlas’ models for South America will go live in January, when both corn and soybeans are both grown enough to be seen from outer space; actual growing conditions and crop performance will then be taken into account. As seen with the latest U.S. growing season, performance was far off from the pre-season projections, given a turbulent year of flooding, heavy rains, dry weather, and then an early freeze. In the end, anything can happen.
What to expect. Stay tuned for Indigo’s monthly in-season production forecast for South America, which will begin in January. We will offer our own production and yield forecasts throughout the year for both corn and soybeans.