U.S. government cuts outlooks for Argentine soybean, corn harvests
Chicago Board of Trade soybean futures rallied to session highs shortly after the March World Agricultural Supply and Demand Estimates report was released.
CHICAGO, March 8 (Reuters) - The soybean harvest in Argentina will be nearly 20% smaller than previously forecast as hot and dry conditions wilted crops there throughout the growing season, the U.S. government said on Wednesday, March 8.
The reduced production from the key global supplier will boost export demand for U.S. soybeans, cutting into already thin domestic stockpiles.
Argentina's soybean harvest was pegged at 33 million metric tons, according to the U.S. Agriculture Department's monthly World Agricultural Supply and Demand Estimates report.
That was down from the February forecast for 41 million metric tons. Analysts had been expecting the report to show an Argentine soybean harvest of 36.65 million metric tons, according to the average of estimates given in a Reuters poll.
The government cut its forecast for the country's corn crop to 40 million metric tons from 47 million metric tons.
"USDA got aggressive taking the Argentine corn and soybean production down, much larger than what the trade was looking for on average," said Terry Reilly, senior commodities analyst with Futures International.
USDA's estimate for soybean production in Argentina is lower than the country's local forecasts, though the Rosario Grains Exchange is expected to cut its forecast of 34.5 million metric tons later on Wednesday.
Chicago Board of Trade soybean futures rallied to session highs shortly after the report was released.
USDA raised its export projection for U.S. soybeans by 25 million bushels to 2.015 billion bushels. It also lowered the outlook for domestic crush to 2.22 billion bushels from 2.23 billion, leaving the stocks forecast at a smaller-than-expected 210 million bushels.
USDA boosted its outlook for U.S. corn supplies by 5.9%. The U.S. does not seem to be competing on the corn export market with South America, despite the weather problems in Argentina.
Domestic end stocks of corn for the 2022-23 marketing year were pegged at 1.342 billion bushels after accounting for a 75 million bushel cut to export projections, USDA said.
(Additional reporting by Karl Plume; Editing by Richard Chang)
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