Argentina is expected to shrink its sown areas of soybeans by 0.3M hectares in the 2011/12 marketing year. The USDA forecast was equal to 19.3M hectares while GAIN named 19M hectares.
At the moment Argentina and Brazil continue their sowing campaigns. Brazil is planning to expand its sown area of soybeans by 3% up to 25M hectares.
In global scale, there is the redistribution of export interests in favor of South America. The chart below shows the 2007-2012 dynamics:
Besides, the price of soybeans is currently above $12/b. In mid-term perspective, the price is expected to rally due to seasonality (the US harvesting campaign is nearly over and is taken into account by the market while Latin America has just started its sowing campaign).
According to the Department of Commodity Trading, , the mid-term prospects depend on the following factors:
Unfavorable weather conditions as well as the data on the sowing campaign in Latin America will be supporting the price. At the same time, the declining export potential of the USA and the weakening US Dollar will be pressing the market.
