"Soybean prospects have greatly improved following abundant rainfall in recent weeks in most of the (Argentine) soybean growing areas," it said. But it did not agree with some local Argentine crop forecasts of up to 53 million tonnes and above as delayed plantings and poor seed quality could cut yields, it said. Brazil's early 2010 soybean crop is forecast to reach 64-65 million tonnes, up from Oil World's December estimate of 63.7 million tonnes and up from 57.4 million tonnes in 2009.
Brazilian prospects are also favourable although considerable concern remains about the impact of the Asian Rust crop fungus, it said. Meanwhile, smaller producers are also likely to achieve larger soybean crops. Paraguay is forecast to harvest a record 6.9 million tonnes in early 2010 from 3.0 million tonnes in early 2009, it said.
"This will boost Paraguay's exports to a new high this year," it said. "Shipments are likely to increase sizeably from February onwards." Uruguay is forecast to produce 1.7 million tonnes from 0.54 million tonnes in early 2009. The looming crops could put downward pressure on global soybean prices, Oil World said.
"The much improved South American soybean crop prospects are currently fuelling a bearish sentiment, which could result in additional sizeable declines in soybean prices," it said. But several factors could still limit South American crop growth, especially deteriorating weather in Brazil which made it hard to apply fungicides on crops threatened by Asian Rust.