Oil World joined commentators disputing last week's US crop forecasts which sent prices tumbling as it extended the round of downgrades for South America's drought stressed crop.
Most criticism of the US Department of Agriculture data last Thursday, showing higher-than-expected forecasts for corn, soybean and wheat stocks at the end of 2011-12, has centred on figures for feed use of grain, which many analysts believe are being underestimated.
The data imply feed use of corn down 9% in the September-to-November period, compared with a year before, "a significant number given higher numbers of hogs and cattle on feed", a report by Paragon Economics and Steiner Consulting said.
Darren Dohme at Illinois-based Powerline Group, which has long accused the USDA of a "lack of logic" in its data, said that "a large majority of grain trading community has been left somewhat shell shocked" by the estimates.
Investors were "looking for explanations - particularly for grain feed usage", Mr Dohme added.
'Reduction in exports inevitable'
However, Oil World on Tuesday extended the doubts to the USDA's soybean estimates, disputing a an upgrade of 45m bushels to 275m bushels in the forecast for domestic inventories of the oilseed at the close of 2011-12.
That put a 28% rebuild in stocks on the agenda despite a disappointing US harvest, and drought-stress crops in Argentina and southern Brazil.
"World demand for US soybeans will pick up in coming months and increase more or less sizeably from a year earlier, depending on the extent of the crop losses in South America and the price developments," Oil World said.
"A reduction in South American exports will be inevitable in 2012, raising demand for US soybeans."
'Conditions are not good'
The influential analysis group cut by 1.8m tonnes to 71.0m tonnes its estimate of the Brazilian soybean harvest, a figure 3.0m tonnes below the USDA's forecast last week, although in line with a figure from Brazil's official Conab crop bureau.
Oil World sliced its estimate for the Argentine harvest by 2.0m tonnes to 50.0m tonnes, 500,000 tonnes below the USDA figure, adding that further downgrades may be in the pipeline.
"It is questionable whether a decline in the Argentine soybean crop below last year's 49.2m tonnes can be prevented," the German-based group said.
In Argentina, the Rosario grains exchange on Friday estimated the soybean harvest at 49.5m tonnes, saying "conditions are not good, either due to delays in planting late-seeded soybeans or the state of early-seeded soybeans in some areas".
'Limited opportunity for moisture'
In Chicago, soybean futures staged a comeback on Tuesday, opening the live session up 1.1% at $11.71 a bushel for March delivery, helped by ideas of further dryness in Argentina, which enjoyed some rains last week.
"Despite a few opportunities for rain in south west Argentina, the two-week forecast offers limited opportunity for moisture," broker Benson Quinn Commodities said.
Gail Martell, at Martell Crop Projections, said that "there still remains a sizable moisture deficit" in Argentina, despite last week's precipitation, if weather in the run-up to the storms is taken into account.
"Marcos Juarez, Cordoba, received 2.25 inches of rainfall, but that makes only 41% of normal rainfall in the 30 days ending January 11," she said.
Commerzbank analysts said that "the still-much-too-dry weather in Argentina and parts of Brazil could diminish crop yields above and beyond the level anticipated by the USDA".
Most criticism of the US Department of Agriculture data last Thursday, showing higher-than-expected forecasts for corn, soybean and wheat stocks at the end of 2011-12, has centred on figures for feed use of grain, which many analysts believe are being underestimated.
The data imply feed use of corn down 9% in the September-to-November period, compared with a year before, "a significant number given higher numbers of hogs and cattle on feed", a report by Paragon Economics and Steiner Consulting said.
Darren Dohme at Illinois-based Powerline Group, which has long accused the USDA of a "lack of logic" in its data, said that "a large majority of grain trading community has been left somewhat shell shocked" by the estimates.
Investors were "looking for explanations - particularly for grain feed usage", Mr Dohme added.
'Reduction in exports inevitable'
However, Oil World on Tuesday extended the doubts to the USDA's soybean estimates, disputing a an upgrade of 45m bushels to 275m bushels in the forecast for domestic inventories of the oilseed at the close of 2011-12.
That put a 28% rebuild in stocks on the agenda despite a disappointing US harvest, and drought-stress crops in Argentina and southern Brazil.
"World demand for US soybeans will pick up in coming months and increase more or less sizeably from a year earlier, depending on the extent of the crop losses in South America and the price developments," Oil World said.
"A reduction in South American exports will be inevitable in 2012, raising demand for US soybeans."
'Conditions are not good'
The influential analysis group cut by 1.8m tonnes to 71.0m tonnes its estimate of the Brazilian soybean harvest, a figure 3.0m tonnes below the USDA's forecast last week, although in line with a figure from Brazil's official Conab crop bureau.
Oil World sliced its estimate for the Argentine harvest by 2.0m tonnes to 50.0m tonnes, 500,000 tonnes below the USDA figure, adding that further downgrades may be in the pipeline.
"It is questionable whether a decline in the Argentine soybean crop below last year's 49.2m tonnes can be prevented," the German-based group said.
In Argentina, the Rosario grains exchange on Friday estimated the soybean harvest at 49.5m tonnes, saying "conditions are not good, either due to delays in planting late-seeded soybeans or the state of early-seeded soybeans in some areas".
'Limited opportunity for moisture'
In Chicago, soybean futures staged a comeback on Tuesday, opening the live session up 1.1% at $11.71 a bushel for March delivery, helped by ideas of further dryness in Argentina, which enjoyed some rains last week.
"Despite a few opportunities for rain in south west Argentina, the two-week forecast offers limited opportunity for moisture," broker Benson Quinn Commodities said.
Gail Martell, at Martell Crop Projections, said that "there still remains a sizable moisture deficit" in Argentina, despite last week's precipitation, if weather in the run-up to the storms is taken into account.
"Marcos Juarez, Cordoba, received 2.25 inches of rainfall, but that makes only 41% of normal rainfall in the 30 days ending January 11," she said.
Commerzbank analysts said that "the still-much-too-dry weather in Argentina and parts of Brazil could diminish crop yields above and beyond the level anticipated by the USDA".
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