WASHINGTON, DC, US — The US Department of Agriculture in its February World Agricultural Supply and Demand Estimates report reduced its forecast for 2022-23 global soybean production to 383 million tonnes, down 5 million tonnes from the January outlook. The main weight pulling production numbers down was the increasingly diminishing prospects for the soybean crop in Argentina, currently experiencing its worst drought in more than half a century.

In the report released Feb. 8, the USDA lowered its forecast for the Argentine soybean crop to 41 million tonnes, down 4.5 million tonnes, or 10%, from the Department’s January projection of 45.5 million tonnes, placing production at a five-year low for the country.

But other analysts suggest the current marketing year’s outlook should be much lower. On the same day as the February WASDE was published, the Rosario Grain Exchange in Argentina pegged the crop at 34.5 million tonnes, down from its previous forecast of 37 million tonnes, and 16% lower than the USDA’s projection.

“The USDA has a really bad habit of being as conservative as possible,” said Brian Harris, executive director and owner, Global Risk Management. “They probably know in their hearts the actual production is going to be lower, but as long as there’s still time for some of the later planted crop to go through pod set with the possibility of some rains, then they’re going to stairstep it down.”

The cut in Argentina’s production was mitigated by the forecast for record soybean production in Brazil, which helped stabilize expectations for global soybean exports. In the February WASDE the USDA left unchanged from January its projection for the 2022-23 soybean crop in Brazil at 153 million tonnes, up 23.5 million tonnes, or 18%, from the country’s estimated soybean production in 2021-22.  

Domestically, the USDA raised its forecast for the US carryover of soybeans on Sept. 1, 2023, to 225 million bushels, up 15 million bushels, or 7%, from the prior month’s projection, and near the high end of the range of trade expectations. The Department slightly reduced projected 2022-23 soybean crush to 2.23 billion bushels, down 0.7% from 2.245 billion bushels forecast in January.