Ideal conditions for Brazil would be modestly below-normal rain for the growing season as a whole. However, timing of the rain also is critical, and some newly planted areas need a good rain to germinate the seeds. At this writing, Argentine soybean planting progress is nearly normal, and Brazilian plantings are slightly ahead of normal. Argentine corn plantings, however, are slightly behind normal. Along with weather conditions, acreage prospects for Brazil and Argentina are potential market influences.
Argentine farmers believe that soybeans are a lower-risk crop than corn in a drought year.
In Brazil, a widely respected industry source indicated soybean plantings may be up slightly from last year, due to the late October-November rise in prices, plus limited financing for input purchases. Uncertainty over final South American soybean plantings, as well as weather concerns, has the potential to create volatile bean markets and temporary strength in soybean prices over the next two months. The prospective decline in Argentina s corn acreage is one of several factors pointing to stronger May-August demand for U.S. corn exports than in this past marketing year. Even so, the larger set-aside is mildly positive to U.S. corn export prospects for this marketing year. Rainfall has improved markedly in the region, but lags in impacts on yields are expected to keep production below a year earlier until at least late February.