Feeling like a broken record, the weather situation for agriculture across most of South America is still pretty good. It has been weighing on the markets, keeping commodity prices in check whenever a bullish run tries to happen. Private and public estimates for corn and soybean production in both Argentina and Brazil are very high for the 2024-25 season, and it's hard to find a reason not to believe it -- except that this is backward looking and not forward looking.

Weather conditions during the last two months have been fantastic across much of Brazil and Argentina. While it hasn't been perfect everywhere, it has been overall very favorable for crop production. However, when looking at the forecast for the remainder of December, there are some obvious signs of concern.

Central Brazil is the first area to focus on. Wet season rainfall has been good so far, enough to pull the region out of the extensive drought from Mato Grosso to Minas Gerais and points northward. What was a two-week late start to the wet season has turned into very good weather conditions during the last 60 days.

Rainfall has been near or above-normal during this time, allowing soil moisture to build toward normal levels and first-crop soybeans develop properly in most areas. However, soybeans are starting to enter their critical pod-filling stage for those planted early, and the forecast for the next week is not favorable. Much more isolated showers will start this weekend, Dec. 7, and last about a week before becoming scattered again. This could hit some areas in the region with below-normal rainfall. While the showers start to fill back in around Dec. 15, below-normal rainfall is forecast for many areas afterward, especially across northern Brazil, where showers may not redevelop. The states of Para, Maranhao, Piaui, Tocantins, and Bahia may be especially at risk, though development in these states is likely further behind. Still, these states represent around 15% of the total soybean production in the country, and production issues here could affect some of the record production estimates floating around.

The next area to watch is Argentina. Waves of showers have been somewhat frequent during the last 60 days. And when drier spots have crept in, showers have come back to fill in soils and provide adequate rainfall. However, it's not all fair weather. Satellite estimates of Normalized Difference Vegetation Index (NDVI) show patches of concern scattered throughout the country. You can find maps that show this here: https://ipad.fas.usda.gov/…

Soil moisture is modeled as close to normal for this time of year, but like central Brazil, development of showers is going to start becoming much more isolated. A front is moving through the country, but only with scattered showers. Many areas across the south and central regions, where soil moisture is a little more tenuous, are getting missed. The forecast here is pointing towards a much spottier nature to showers going forward. Unlike central Brazil, which will see showers increasing mid-month, showers are forecast to continue to be spotty throughout the rest of the month. Areas in the east look less likely to see significant rainfall than others, including many areas of the fertile Pampas region in central Argentina. If this plays out as forecast, drought could increase across the country.

Now, of course everything discussed above is pure speculation. A week's worth of poor rain in central Brazil may not mean a whole lot to the overall good soybean production. Even scattered, lighter rain in Argentina may not have a dramatic effect on corn and soybean development, which is much further behind its counterparts in Brazil. But there is still potential for weather to play a negative role in South America's crop production, despite the recent great conditions. Some traders may not be seeing this potential. We still have a long way to go before this season is over.

To find more international weather conditions and your local forecast from DTN, visit https://www.dtnpf.com/….

John Baranick can be reached at john.baranick@dtn.com

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