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USDA expected to adjust South American crop production in upcoming report

A market analyst with Total Farm Marketing says he’s looking forward to seeing USDA’s forecast for South American crop production in Friday’s supply/demand report.

John Heinberg tells Brownfield continued dry conditions in Brazil are likely to encourage a lower crop production forecast. 

“In terms of the soy side of the equation for Brazil, we’re expecting production at 160 million metric tons, down 3 million metric tons from the November projections.”

CONAB, Brazil’s equivalent of USDA, has already lowered its corn and soybean production estimates. Heinberg says it will be interesting to see how USDA forecasts Argentina’s crops.

“They’ve been dealing with drought the last few growing seasons and this year, things look kind of back to normal. The crops still need moisture,” says Heinberg. “We expect estimates at 48 million metric tons for soybeans and 54 to 55 million metric tons for corn, bringing things back to the 5-year averages.”

Heinberg says traders aren’t expecting much of a market response to USDA’s supply/demand report unless there’s a surprise. USDA’s estimates are out on Friday at Noon Eastern/11 Central.