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US government lowers Argentine corn, soy harvest view

Soybean production in Argentina will fall to a 23-year low and corn production to a five-year low as a drought decimated fields in the key South American producer, the U.S. government says.

FILE PHOTO: A corn plant affected by the weather is seen on a farm, amid Argentina's worst drought in sixty years, in Tostado,
A corn plant affected by the weather is seen on a farm, amid Argentina's worst drought in sixty years, in Tostado, northern Santa Fe Argentina Feb. 9, 2023.
Miguel Lo Bianco / Reuters file photo

CHICAGO, April 11 (Reuters) - Soybean production in Argentina will fall to a 23-year low and corn production to a five-year low, smaller than previously thought, as a crop-wasting drought decimated fields in the key South American producer, the U.S. government said on Tuesday, April 11.

Argentina's soybean harvest was pegged at 27 million metric ton and the corn crop at 37 million metric ton, according to the U.S. Department of Agriculture's monthly World Agricultural Supply and Demand Estimates report.

It was the fourth month in a row the USDA has lowered its outlook for both the corn and soybean crops in Argentina, but the government left its forecasts above the Buenos Aires Grains Exchange's most recent estimates of a 25 million metric ton soybean harvest and a 36 million metric ton corn harvest.

"They took an axe to the Argentine crop, which was expected, so no huge surprise," said Don Roose, president of U.S. Commodities.

Argentina crushes the bulk of its soybeans into soymeal used by the export market. The reduced production forecast will force the country to buy more soybeans from Brazil to satisfy demand at processors.

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The smaller soy crop could drive up already high prices for soymeal as top importer China boosts purchases while it seeks to build up its hog herd amid rising demand for pork. Chicago Board of Trade soymeal futures rallied to their highest in nearly nine years in February.

If the USDA forecasts are realized, the soybean harvest would be the smallest since Argentine farmers produced 21.20 million metric tons of the crop in the 1999-00 marketing year. Corn production would be the lowest in the country since 2017-18, when growers harvested 32 million metric tons of the grain.

A month ago, the USDA forecast Argentine soybean production at 33 million metric ton and corn production at 40 million metric tons.

Analysts had been expecting the report to show Argentina's soybean harvest at 29.3 million metric ton and its corn harvest at 37.12 million metric tons, according to a Reuters poll.

(Reporting by Mark Weinraub; Additional reporting by Cassandra Garrison in Mexico City; Editing by Jonathan Oatis)

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