March 2, 2011

Oil World raises Argentine 2011 soy crop estimate

Oil World had raised Tuesday (Mar 2) its forecast for Argentina's 2011 soy crop by 500,000 tonnes from its previous estimate in February after scorched crops received rainfall.

Argentina's 2011 soy crop is likely to reach 48.50 million tonnes against 54.4 million tonnes in 2010, it estimated. On January 18, Oil World had warned the Argentine crop could fall to or below 46 million tonnes.

"Beneficial rains have been received in the major (Argentine) soybean belt in the past few days, promoting crop development," Oil World said. But the crop will still be down on the year as it is too late for some soybean plants to recover, the Hamburg-based firm said.

The view that the Argentine crop will not be as bad as expected has been a weakening factor for soy prices recently.

The reduced crop will cut Argentina's March 2011/February 2012 soy exports to nine million tonnes from an estimated 13.51 million in the previous season, it said.

Oil World said last week that Brazil's 2011 soy crop could reach 72 million tonnes from 68.6 million tonnes if good weather continues, but on Tuesday it said it continued to estimate 71.5 million tonnes.

The soy crop outlook is also improving in smaller South American producers. Oil World forecasts Paraguay's 2011 crop will rise to 7.25 million tonnes from seven million tonnes in 2010, Uruguay's to 2.1 million tonnes from two million tonnes and Bolivia's to 1.78 million tonnes from 1.7 million tonnes.

Including stocks, the better crop outlook means South American export supplies will still be close to last year's, which may mean reduced US soy exports in coming months, it said.