The USDA’s Foreign Agricultural Service has given declining estimates for Argentina’s corn and soybean production.

Jim Sutter, CEO of the U.S. Soybean Export Council, says it has been a tale of two countries, with Brazil getting meaningful rain relief while Argentina has seen soybean production estimates continue to drop.

“I think the crop in Brazil is looking like it’ll be a record,” he says. “Certainly a good uptick in the crop in Brazil. Argentina, this year their crop has really suffered from drought.”

Sutter says the U.S. and South America compete for export markets, but they are both working toward the same goal.

“North and South America compete, but I think about it as we’re co-suppliers to the world,” he says. “The U.S. doesn’t grow enough (soybeans) to supply the world, and neither does Brazil.”

Sutter says the USSEC works to develop and maintain export markets, including promoting the nutrition, quality and sustainability of U.S. soybeans.

“Our job is to differentiate and build a preference for U.S. soy, and ensure access for U.S. soy,” he says.

Cory Bratland is a chief grain strategist and commodities broker for Kluis Commodity Advisors. He says he is watching trends in South American weather and its crops to see what crop markets might do in 2023.

“The thing that comes to mind, first and foremost, is the size of the South American crop,” he says. “The last two or three years, there has been a rally in beans because La Niña has been shaving off a few bushels down there.”

As news comes in about regions of Argentina and Brazil getting dry or catching a rain, crop markets in the U.S. have reacted accordingly.

In a farmdoc daily article, University of Illinois ag economists Gary Schnitkey, Joana Colussi, Nick Paulson and Joe Janzen, and Ohio State ag economist Carl Zulauf explain the impact of South American crops on the global market and exports.

“South America now has a greater presence in the world soybean market than the U.S.,” the authors say. “Understanding soybean production in South America is as important, maybe more important for American farmers and agribusinesses than understanding soybean production in the U.S. The U.S. remains the world’s leading producer of corn, but understanding South American corn production has become important to being an informed producer and marketer of corn.”

Using data from the 2018 to 2022 crop years, Brazil is the world’s leading soybean producer, with 4.905 million bushels per year, while the U.S. is close behind at 4.495 million bushels annually. Argentina produces 1.8 million bushels of soybeans a year during that time frame, almost as much as the combined total for Illinois, Iowa, Minnesota and Indiana, the top four U.S. soybean states. South America in total produces 7.232 million bushels a year.

On corn, the U.S. remains the world leader, growing more than twice as many bushels per year, 14.208 million, as the entire South American continent, with 6.730 million bushels annually. But the South American production is still large enough to impact prices and export markets, with Brazil’s 4.189 million bushels a year representing 68% more bushels than Iowa, the top U.S. corn state. Argentina produces 2.063 million bushels of corn annually, slightly less than the production of Illinois, the second U.S. corn producing state.

Schnitkey, Zulauf, Colussi, Paulson and Janzen say the potential to grow multiple crops in a year boosts South American production.

“South America’s potential for multiple cropping is another reason to become knowledgeable about South American corn and soybean production,” they say. “Brazilian farmers, in particular, are double and even triple cropping.”