Hopes for South America's soybean production took another
dent with downgrades from Informa and from Oil World, which elsewhere in the
oilseeds complex cautioned over South East Asia palm oil output too.
Informa, citing both a lower estimate for soybeans and
weaker yield hopes, downgrades its forecast for Argentina's forthcoming soybean
crop by 3m tonnes to 54m tonnes.
That figure, representing an increase of nearly 5m tonnes
year on year, is in line with the forecast from the US Department of Agriculture,
if above an estimate last week of 53m tonnes from the Buenos Aires grains
Informa also cut its forecast for the Brazilian soybean
crop, by 900,000 tonne to 88.8m tonnes.
That figure is below the 90.0m tonnes forecast by the USDA,
whose data set global benchmarks, but and in line with an estimate from
Brazilian industry association Abiove last week, although some other observers
have far lower numbers, citing the weathers extremes of too little or too much
rain which have hit southern and western areas respectively.
Michael Cordonnier, the respected crop scout, overnight cut his estimate to 87m tonnes.
However, Oil World separately on Tuesday cut its forecast for
the Brazilian harvest for a second successive week, this time by 1m tonnes to
84m tonnes, still a record, but by a modest 2.5m tonnes.
"Brazilian soybean crop prospects have further
deteriorated," Oil World said, adding that the reduced prospects "will considerably
squeeze world soybean supplies, considering the tightness in the US and the
reduced crops harvested in China and India".
The group noted excessive wetness in Mato Grosso, Brazil's
top soybean producing state, where rains are to return this week to delay the
harvest, after some drier weather last week.
Oil World's comments follow a 500,000-tonne reduction to 26.4m
tonnes in the forecast by Imea, the agricultural economics institute, to its estimate
for the crop in Mato Grosso, the biggest soybean growing state.
Meanwhile, the farm department in second-ranked Parana has
estimated losses at 2m tonnes, with the potential to hit 2.5m tonnes if dry
And Aprosoja, the Brazilian soybean growers' association,
has pegged losses from heat to the soybean crop in Rio Grande do Sul, Brazil's
third-ranked producing state, at 20% in the worst affected areas.
'Have to be watched
Oil World also separately put investors on alert over the
potential for a dent to world palm oil production from dryness in some parts of
Indonesia and Malaysia, the top two producing countries, as well as Thailand.
In Malaysia, Johoor state received less than one-half of its
normal rainfall for January, with much of Thailand's palm area and central
Sumatra in Indonesia receiving less than 20% of typical precipitation over the
Further developments in Indonesia, "will have to be watched
closely," the researcher said, foreseeing a dent to Malaysian production
towards the end of 2014 if dryness lasts another two or three weeks.