USDA FAS cuts Argentina soybean guess, sees big Brazil corn crop

The USDA’s Foreign Ag Service has slashed its outlook for Argentina’s soybean crop due to hot, dry weather late last year, while projecting a big grain crop in Brazil.

The FAS now has Argentina’s soybean crop at 36 million tons, 9.5 million less than the most recent official USDA projection. That could lead to increased demand for U.S. soybeans and soybean products as Argentina is the world’s leading exporter of soybean meal and oil.

La Nina conditions are easing, leading to a somewhat wetter weather pattern and improving second crop prospects, but more will be needed.

The weather woes have recently pushed March soybean meal futures to contract highs and have helped the nearby months for soybeans hang around the $15 per bushel mark.

For corn in Brazil, the FAS estimates the combined crop at 125.5 million tons, a half a million more than the last supply and demand report and up 8% from last year’s total because of better weather.

That likely means more competition for the U.S. on the export market, especially with China, due to the lower cost of Brazilian corn. The attaché sees Brazil’s corn exports at 747 million tons this marketing year.

Brazil has three corn crops, with planting underway on the second crop, but that pace is slower than average due to rain in some areas delaying the soybean harvest.

Brazil’s wheat crop is expected to be a record 9.6 million tons, with potential exports of 3.5 million tons.

The USDA’s next set of global production estimates is out February 8^th, with CONAB’s updated outlook for Brazil scheduled for the 9^th.

Tags: dry weather, Argentina, USDA, estimates, grain, soybean oil, Brazil, soybean, Outlook, La Nina, soybean meal, crop