According to research by USDA and Buenos Aires Grains Exchange, there will be a rise in soybean plantings up to +10% for Brazil, and +6% for Argentina, with cotton, wheat and corn losing out to cash crop king soybean. This is partly the result of a disastrous 2011/12 harvest that has affected the finances of farmers in Argentina, Uruguay and Brazil (January 2012 drought) and led to low soybean stocks.
Argentine soybean sowings are expected by US Department of Agriculture staff and by the Buenos Aires Grains Exchange to rise by some 6% this year, to 19.7m hectares. Brazilian plantings are estimated by the USDA at 27.5m hectares, a 10% increase.
Research by farm officials in Rio Grande do Sul, Brazil shows that producers can expect to turn a profit of 72% on their soybeans, compared with 25% on corn.
All the above suggests that 2012/13 could well turn a very good harvest for soy, but point to a potentially less rosy outlook for corn, at a time of historically low stocks, a firm ethanol mandate in the US and a planet increasingly hungry for animal proteins. Let's see what 2013 has in store...and in particular where feed costs - largely driven by corn prices - will be heading to.
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