Rabobank cuts Argentina soy, corn production forecast
Dutch bank Rabobank cut its forecast for Argentine corn production by 2 million mt to 39 million mt on Tuesday, with its soybean forecast also falling to 51.5 million mt, making the bank’s analysts some of the most pessimistic in the market.
In a regular report, the banks’ analysts said that persistent dry conditions during pollination across Argentina have impacted the early planted corn crop, which has led to the write down in production.
It also cut its corn export forecast 1.5 million mt to 28 million mt
“This is also supportive to our view for record 2018/2019 US exports of at least 1.95 billion bushels,” the analysts said.
The bank’s production estimate is now 3 million mt lower than USDA forecasts and lower than almost all other analysts.
As a result, Rabobank expects corn prices to rise from a Q4 average of $3.46/bu to $3.60/bu in Q1, $3.70/bu in Q2, $3.90/bu in Q3 and $3.70/bu in Q4.
In terms of soybean, the bank expects Argentina’s production to reach 51.5 million mt, also making it one of the lowest estimates out there, while it kept its Brazil estimate steady at 111 million mt, also low compared to most of other estimates.
“The prospects of a smaller Argentine soybean crop and the associated reduction in stocks available for export are also supportive of our view that US exports of both soybeans and soymeal will be a record high in 2017/18: we currently forecast US soybean exports at 2.19 billion bushels,” the report said.
The bank expects Q1 prices on the Chicago Board of Trade to average $9.80/bu, Q2 at $9.90/bu, Q3 at $10.05/bu and Q4 at $9.80/bu.
In terms of wheat, the bank’s forecast price rise was less pronounced for corn or grain, as the threat of winterkill in the US would be partially offset by more favourable weather in Europe and southern Russia.
Rabobank expects prices to rise from a Q4 average of $4.24/bu on the Chicago Board of Trade to $4.50/bu for Q1, $4.70/bu for Q2, $4.60/bu for Q3 and $4.70/bu for Q4 with a similar trend expected on Matif.