USDA Trims Argentina Corn, Soy Harvest Estimates After Dry Weather

By Tom Polansek

CHICAGO, Feb 11 (Reuters) – Argentina, a major grain supplier, will harvest less corn and soy than previously expected after hot, dry weather hurt crops, the U.S. Department of Agriculture said on Tuesday.

Grain traders have been closely monitoring dryness in Argentina because it is the world’s top exporter of soyoil and meal, the No. 3 exporter of corn, and competes with the U.S. for global grain and soy sales.

Corn production is particularly important because world inventories for 2024-25 are projected to drop to their lowest level in a decade due to robust demand and a smaller than anticipated U.S. harvest last year.

Corn and soy futures prices turned lower at the Chicago Board of Trade after USDA updated its crop estimates, as traders anticipated lower production in Argentina.

USDA pegged Argentina’s corn crop at 50 million metric tons in a monthly report, down from 51 million in January. The agency pegged soybean production at 49 million metric tons, down from 52 million last month.

Analysts surveyed by Reuters were expecting 49.5 million metric tons of corn and 50.49 million metric tons of soybeans.

“This is a valid, light cut,” said Rich Nelson, chief strategist at brokerage Allendale.

Rains benefited Argentina’s crops recently but did not reach all growing areas, and some damage was already done, analysts said. Farmers have found smaller than usual corn cobs and yellowing crop leaves in their fields at a time when they should be green.

USDA also lowered its estimate for Brazil’s corn crop to 126 million metric tons from 127 million in January.

In the U.S., estimates for corn and soy inventories were left unchanged from January.

“The trade didn’t get the bullish dopamine hit right away because the U.S. numbers didn’t come down,” said Craig Turner, commodity risk management consultant at StoneX.

(Reporting by Tom Polansek, Additional reporting by Heather Schlitz and PJ Huffstutter in Chicago, Editing by Chris Reese)