Will Soybeans Look Past Good Brazil Weather?

Chicago soybean futures maintained their bearish trade as good weather continued in Brazil. However, if the weather retains the current status quo, the market may look past Brazil’s production. 

Brazil’s 2024/25 soybean planting reached 80 percent complete as of last week, according to consultancy firm AgRural. Planting in Mato Grosso, Brazil’s top soybean-producing state, is nearly complete, with Paraná not too far behind. 

Brazil’s planting concerns are diminishing as rain continues in the region. The country receiving an on-time start to its wet monsoon season was needed, considering it was experiencing historical drought conditions just before farmers began planting. Consequently, soybean planting was off to the slowest pace in three years. 

Ongoing rain through October and November allowed Brazilian farmers to catch up and surpass average planting speeds.

At this point, La Niña’s influence is important for Brazil to maintain favorable weather conditions and crop development. Brazil’s major crop areas benefit from La Niña, represented by cooler ocean temperatures in the Pacific Ocean. The National Oceanic and Atmospheric Administration predicts a later start for La Niña than initially expected, though forecasters still think La Niña will develop and last through the winter. 

Brazil’s soybean production is on pace to reach a record 169 million metric tons (MMT), according to the most recent USDA forecast. Brazil’s equivalent (Conab) forecasts production at a record 166.14 MMT. The record production estimates will keep Brazil competitive with the U.S.

Abiove, a Brazilian industry group, forecasts the country’s soybean exports at a record 104.1 MMT for 2025, up from 98.3 MMT in 2024. Brazil exports less soybeans in the fall and winter before harvesting its crop early next year. U.S. shipments must remain strong during the current window before Brazil’s crop exports are online again. 

According to Mato Grosso’s government, farmers have already sold 38 percent of their 2024/25 crop, compared to 35% last year. However, sales were six percentage points below the five-year average. 

With Brazil’s soybean planting nearly finished, soybeans have given back their gains from October, when planting concerns were at their height. With Brazil’s soybean crop priced in, production has wiggle room for the weather to shave off a few percentage points before the market cares. Prices are likely watching for signs of production issues, either in Brazil or elsewhere. 

The next story that could shift the market’s eyes from Brazil is Argentina. While La Niña favors Brazil, cool ocean temperatures often lead to drier conditions further south. The relationship was apparent when Argentina’s soybean production fell more than 50 percent in the 2024/25 season.

Record low production severely impacted Argentina’s soybean crush market, which allowed the U.S. to gain a larger share of the meal export market. This year, the U.S. will face more competition again as Argentina’s production returns to normal levels. Aside from poor whole soybean exports, meal prices continue to bog down the soy complex. 

In conclusion, the market likely moved past favorable Brazil weather and is watching for potential issues in South America moving forward. Additionally, further demand concerns may mean soybeans continue to cozy up to the $9 handle.

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