Market Matters Blog

Informa Economics today trimmed Argentina's soybean production estimate by 1.1 million metric tons, citing a 300,000 hectare reduction in expected plantings, pegging production at 58.4 mmt. Brazil's forecasted to produce 81.4 mmt, a 150,000 mt increase from the prior month because of a 50,000 hectare increase in planted acreage.

And the delays in getting soybeans planted, and therefore harvested, in Brazil's Goias and Bahia provinces means 400,000 fewer hectares will be planted to into Brazil's Safrina crop, the second crop of corn grown in Brazil's more tropical regions. Informa estimates Brazil's total corn production at 66.2 mmt, 600,000 mmt less than last month's estimate. In November, USDA estimated 70 mmt of Brazilian corn production.

In Argentina, the cuts to the corn crop are even larger. Informa trimmed 1 mmt off its forecast as plantings have been running about a week behind average and are only 63% complete as of Nov. 29. Production is estimated to be 27 mmt. Informa shaved 100,000 hectares from expected planted acreage and trimmed yield forecasts. Last month, USDA estimated Argentina would product 28 mmt

"The changes in Brazil soybean production due to increased acreage isn’t overly surprising given the continued weather problems in parts of southern Brazil (Rio Grande du Sol I think). Likewise, reductions in Argentine production of both corn and soybeans due to weather should be expected," DTN Senior Analyst Darin Newsom said.

"The interesting thing is that the net result is a reduction in South American production at a time when there is no margin for error in global supplies. Also, these crops won’t likely be available until mid-March at the earliest keeping the global supply and demand situation tight."

And on the wheat front, Informa notes that Argentina's wheat production is expected to be 11.5 mmt, down 500,000 mt from last month. That's 4.5 mmt less than what Argentina grew last year and it's due to a 22% reduction in seeded area and a slight reduction in expected yields.

"Wheat news looks to be a bit bearish with a larger crop in China offsetting possible losses in Argentina," Newsom said. China's wheat production is estimated at 120.6 mmt, 2.6 mmt larger than Informa's last forecast.

The next World Agricultural Supply and Demand Estimates will be released by USDA Tuesday, Dec. 11 at 7:30 a.m. CT.