February 1, 2012

Argentina's corn, soy crops lesser than last year

Archer Daniels Midland Co. (ADM) said Tuesday (Jan 31) that South America's corn and soy crops will be smaller than a year ago due to drought.

Grains traders have for weeks been downgrading their expectations for crops in Argentina and Brazil because of hot, dry weather, but many analysts have still assumed the total output would be higher than a year ago because of increased planted acreage.

But Craig Huss, senior vice president and chief risk officer for ADM, said the total production would end up below year-ago levels.

"The dry weather in Argentina has had an impact on corn for certain, and it's had some impact on soy," Huss told investors in a conference call to discuss ADM's second-quarter earnings.

The USDA earlier this month projected Argentina corn production of 26 million tonnes, up from 22.5 million a year ago. But many analysts think the USDA will revise its estimate lower in its February report.

The USDA estimated Argentina's soy crop at 50.5 million tonnes, up from 49 million a year ago.

The government's most recent estimate for Brazil's corn crop was 61 million tonnes, up from 57.5 million a year ago, and its January soy crop estimate for Brazil was 74 million tonnes, down from 75.5 million a year ago.