A forecasted soybean bumper crop in South America in early 2010 will ease world reserves of grains, currently at very low levels, and will also have an impact on international prices according to Oil World.
Soybean prices can be expected to come under "strong down pressure during the next three to six months" if the forecast of a bumper crop in South America is confirmed.
According to the publication, Argentina's soybean production in the first half of 2010 will climb to 48 million tons, compared to 32 million in 2009 when an extended drought caused a drastic fall in the crop.
Brazil's 2009/10 harvest is estimated to climb to 63.7 million tons from 57.4 million the previous season, while Paraguay is expected to almost double last season's production, 3.9 million tons to 6.7 million tons.
Including the smaller producing countries, soybean in the Mercosur countries in 2010 will be reaching 123.13 million tons, well above the 97.22 million of 2009.
"After two consecutive years of insufficient crops, a strong surge in soybean production in the second half of the season will alleviate the market", writes Oil World. However, fears persist regarding climate conditions.
It is not certain yet if Brazil will be planting all the announced area given the excess humidity in the main region, Rio Grande do Sul. Similarly in Argentina dry conditions persist in soybean areas to the west and south, which could see a decrease in yields.
Mercopress
