November 16, 2011
Latin American soy area fall below estimate
This season, farmers in Argentina and Brazil will sow less soy area than hoped as they turn to corn due to high corn prices, Hamburg-based oilseeds analysts Oil World forecast on Tuesday (Nov 15).
"The soybean production in Argentina and Brazil may indeed be decimated by a larger-than-expected shift of acreage from soybeans to corn," Oil World said.
This could help raise export demand for US soy although the impact would not be clear for some months. The US is the world's largest soy producer, with Brazil in second place followed by Argentina.
"The effect of decimated South American crops on demand for US soy would unfold only partly in February/August 2012 but mostly only in September/January 2012/13," it said.
Global corn prices have risen by 1.6 percent in the last year while soy prices have fallen by 15.6 percent, reducing the attraction of soy to farmers.
Argentine 2011/12 corn plantings will rise to 4.87 million hectares from 4.56 million hectares in 2010/11, Oil World forecasts.
The corn expansion means Oil World predicts Argentine 2011/12 soy plantings will fall to 18.76 million hectares from 18.89 million hectares.
Observers in Argentina, the world's No. 2 corn supplier after the United States, are also expecting a sharp rise in the corn crop.
"The expansion of soybean plantings is probably pausing in Argentina for the time being," Oil World said.
Argentina's soy area has more than doubled in the last ten years.
Brazilian soy plantings are still likely to increase despite intensifying competition for land from corn, Oil World said.
It estimates Brazil's 2011/12 soy plantings at 24.70 million hectares, up from 24.18 million hectares in the previous season.
Brazil's 2011/12 corn sowings will rise sharply to 14.55 million hectares from 13.84 million hectares in the previous season, Oil World forecast.
Brazil's government is also forecasting higher corn crops and a smaller soy area.