HAMBURG: Weather damage to South American soybean crops could start pushing more soybean export business to the United States and US export shipments could benefit from March, Hamburg-based oilseeds analysts Oil World forecast on Tuesday.
"South American soybean export supplies will be smaller in calendar year 2019," Oil World said in a report. "The United States should benefit and raise exports beyond expectations in March/August 2019."
"But part of this impact is going to be neutralised by the likelihood of a downward revision in Chinese soybean imports this season."
Heavy rain threatens soybeans in Argentina. In Brazil, drought and a heatwave are causing concern.
"This year's South American soybean crop will turn out sharply lower than expected," Oil World said. "It is impossible to say at this stage whether the damage (in main South American producers) so far is 6 or 8 million tonnes or even more."
Brazilian soy crop estimates vary between 113 million and 117 million tonnes against last season's Brazilian crop estimated by Oil World at 120.7 million tonnes.
"There is an increasing risk that the Argentine soybean crop will turn out below 49-50 million tonnes compared with previous estimates of 50.5-51.5 million tonnes, but it will still be up sharply from last year's drought-reduced 35.3 million tonnes," Oil World added.
Crop losses of 0.8-1.0 million tonnes are expected in Paraguay and 0.3-0.5 million tonnes were lost in Uruguay, it estimates.
A Chinese delegation is due to travel to Washington this week for fresh talks aimed at resolving the US-China trade dispute, which has slashed US soybean exports to China.
"It remains to be seen whether a breakthrough can be reached in the US-China trade negotiations in Washington at the end of January," Oil World said. "If not, soybean futures may come under pressure in line with deteriorating prospects of an increase in Chinese purchases of US soybeans."
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