BRASILIA, BRAZIL — Brazil is expected to become the leading soybean producer worldwide surpassing the United States, according to a Dec. 27 Global Agricultural Information Network report from the U.S. Department of Agriculture (USDA).

During the 2019-20 season Brazil’s soybean planted area forecast is revised up to 36.8 million hectares due the weakening Brazilian real against the U.S. dollar. The report notes these price developments pushed some producers to plant a larger area of soybeans than usual.

However, the report said there is a lot of uncertainty concerning Chinese demand due the widespread outbreak of African swine fever (ASF), which has reduced China’s swine herd and cut feed needs.

“Additionally, producers are keenly following the emerging trade truce between the U.S. and China,” the report said. “Producers are cognizant that a trade accord between Washington and Beijing is almost certain to lessen Brazilian exports and exert downward pressure on Brazil’s soybean prices.”

Brazil is expected to overtake the United States as the leading soybean producer in this coming season as long as local weather does not deteriorate.

Brazil’s 2019-20 soybean crop is forecast to be a record crop of 123.5 million tonnes compared to its previous record in 2017-18 season of 122 million tonnes.

In comparison, the World Agricultural Supply and Demand Estimate (WASDE) issued by the USDA expects U.S. soybean harvest less than 100 million tonnes in 2019-20, a drop of 20% compared to the previous season. Inclement weather negatively affected the U.S. soybean crop in both the planted area and yields.

In market year 2019-20 Brazil is forecast to export 75 million tonnes of soybeans, but the report expects a reduce in demand from China due to the ASF outbreak and a possible trade agreement between the United States and China.