Much-watched Washington forecasts for South American soybean exports are 3m tonnes too high, US farm officials said, citing factors from "infrastructural collapse" to crop damage from poor weather and insect pests.
US Department of Agriculture foreign attaches cut estimates for soybean exports in Argentina, Brazil and Paraguay, countries which with America comprise the world's top-four shippers, by a total of 3.03m tonnes below official levels.
In Paraguay, a small downgrade, of 200,000 tonnes, reflected increased domestic crush capacity, with Archer Daniels Midland having in November opened a plant with capacity to process 1m tonnes a year, and a similar-sized site being launched by Aceitera General Deheza, Bunge and Louis Dreyfus in June.
However, downgrades to forecasts for Argentine and Brazilian harvests were down to lower production estimates, besides the logistical hiccups which have left ships waiting more than a month to load up at Brazil's port, where exports have got off to a slower start than last year despite a bigger harvest.
The attaches forecast for the Argentine soybean harvest at 48.5m tonnes, 3.0m tonnes below the official USDA estimate, citing the impact of a two-month drought that broke in mid-February, and frosts that will "definitely" dent yields in some areas.
"In the northern area of Argentina, producers are suffering from extreme drought for the second season in a row," the attaches said.
"Many are expecting to lose between 30-50% of their production."
A 950,000-tonne downgrade to the export forecast "is a direct result of the lowered production number".
For Brazil, the soybean harvest was pegged at 82.0m tonnes, 1.5m tonnes below the official USDA forecast, citing "excessive rains and limited sunlight" which have limited yields in the main Centre West production region.
In the North East, crops were damaged by "irregular rains and pest pressure", with crops in the state of Bahia suffering "greatly from pest adaptation".
"Soybeans which are developing in the pod are being consumed by the corn earworm or cotton bollworm," forcing farmers to double to some $200 per hectare their spending on pesticides.
Even so, the state's soybean crop "has already suffered irreversible damage, and concern has now shifted to cotton", of which Bahia is Brazil's second-ranked growing state.
The costs are adding to the soaring transportation costs which have also "been passed back to the producer, and will dampen potential growth" in production, the attaches said, flagging Brazil's "infrastructural collapse".
"Lack of investment in strategic infrastructure planning has reached a critical stage during this record crop year," they said, noting long waits facing trucks to unload and ships to take-on crop, even before factoring in delays caused by lingering unrest among dock workers.
While Brazil's soybean exports are expected to reach 6m tonnes a month "over the next couple of months", they will then decline as shipments of corn and sugar, and other crops such as coffee, ramp up.
"Export logistics and port capacities are already strained and this situation will be exacerbated in the second half of 2013 as soybeans compete with other export crops."
The comments come a week before the USDA is set to update its forecasts for world crop supply and demand, in its monthly Wasde report.
Informa Economics will later on Wednesday unveil its pre-Wasde estimates.