South American Drought Slashes Soybean Forecasts, Bringing Bullish Implications for U.S. Exports

The decline to South American crop production continues amidst devastating drought, shrinking the overall global soybean crop. USDA has lowered soybean production in the three South American countries by more than 18 million tons, calling for the small crop forecast since 2018. Together, Brazil, Argentina and Paraguay make up more than half of the world’s soybean supply.

Drought conditions brought on by La Niña continue to worsen, opening the possibility that forecasted soybean production could be even lower. In the U.S. soybean prices reached a nine-year high last month, in conjunction with the crisis happening in Ukraine. The realities of both hits to global soybean output could signal bullish implications on U.S. soybean exports.

Read more on South American soybean production here.