The Agricultural and Horticultural Development Board (AHDB) has confirmed that South American weather patterns are now impacting UK grain market trends in a meaningful way.
Brazil is the largest exporter of soyabeans and second-largest exporter of maize globally.
While Argentina is the third largest global exporter of maize, it is the biggest exporter of soyabean oil and meal.
Together, these two countries account for 15% of global maize production and 52% of soyabean production. Any changes in their output can have a significant impact on global prices and therefore domestic prices.
According to AHDB analysts, UK grain and oilseed market movements over the past month have been driven partly by South American weather.
Argentina has been hit by a prolonged drought causing crop losses, while late planting and wet weather are slowing down Brazil’s soyabean harvest.
This may also have a knock-on impact on the country’s second maize crop plantings.
Argentina
Recent rainfall in Argentina eased drought conditions but the rains were not sufficient to reverse crop losses.
In the February edition of the World Agricultural Supply and Demand Estimates (WASDE) report, the United States Department of Agriculture (USDA) lowered Argentina’s 2024/25 maize production forecast to 50 megatonnes (MT), down 1MT.
Meanwhile, Argentina’s Rosario grains exchange has also revised its maize production estimate down by 2MT on the month and 6.5MT down on the year to 46MT, due to further declines in crop conditions.
The exchange also released its first estimate for soyabean production of 47.5MT, down 2.5MT on the year.
According to data from the Buenos Aires Grain Exchange, as of 12 February, 33% of Argentina’s maize crop was rated as poor/very poor, compared with 26% a week earlier, and 17% at this point last year.
For soyabeans, 36% of the crop was rated as poor/very poor, compared with 32% a week earlier, and 17% at this point in 2024.
Brazil
The USDA’s projection of a record 169MT soyabean crop in Brazil has been a key factor supporting global supplies and has been underpinning the market over recent weeks.
However, the slow start to harvest, due to late planting and recent adverse weather, has raised concerns about the crop’s potential.
Conab (part of Brazil’s agricultural ministry) has reduced its crop forecast by 0.3MT to 166.01MT.
Brazil’s second maize crop (Safrinha) planting depends on how quickly soyabeans are harvested. Currently, projections for the 2024/25 maize crop are 122.01 Mt by Conab and 126.0 Mt by the USDA.
Delays in soyabean harvesting could push back Safrinha planting, potentially impacting its yield and the area planted. Over the next week, less rainfall is expected in Brazil, which will aid in the progression of the soyabean harvest.
