May 25, 2011

Oil World predicts fall in Argentine soy crop harvest

Oil World cut its forecast of Argentina's 2011 soy crop by 0.3 million tonnes, as harvest yields were poorer than expected after unfavourable weather.

Oil World now forecasts Argentina's 2011 soy crop at 49.2 million tonnes, down from 53.9 million tonnes harvested last year.

On May 10, Oil World had forecast the 2011 crop at 49.5 million tonnes.

"Some observers argue that the crop could finally turn out at slightly below 49 million tonnes."

Argentine soy suffered from dryness in early 2011. Rain in April and May relieved crops but some soys are too badly damaged to be saved, Oil World said.

Argentina is the world's No. 1 soymeal and soyoil exporter and the world's third-biggest soy producer. The Argentine government is more optimistic and expects a 2011 soy harvest of 50.4 million tonnes.

Buenos Aires Grains Exchange also expects 49.2 million tonnes while the USDA predicts 49.5 million tonnes.

"The last 25% of this year's (Argentine) soy harvesting will not bring the expected results," Oil World said. "Although yields in the northern areas have been very good of late, the poor results in the central regions and the Buenos Aires province cannot be compensated (for)."

Argentine farmers are likely to abandon 0.4 million hectares of soy although some Argentine crop watchers expect up to 0.6 million hectares to be abandoned, Oil World said.

In neighbouring Brazil, the world's No.2 soy producer after the US, Oil World is more optimistic after better weather and currently forecast a record soy crop.