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South American crop is a surprise to markets

An analyst says the size of the South American soybean crop is hitting the market as a complete surprise.

Dr. Michael Cordonnier, president of Illinois based Soybean and Corn Advisor says the South American soybean crop right now is 3 million tonnes smaller than last year.  “The soybean crop in South America right now is 3 million tonnes smaller than last year,” he says.  “It has broken the string of record, record, record crops out of South America.  The next crop that they’ll plant in the next couple of months in South America could be smaller than this one.”

He tells Brownfield he’s anticipating an increase in acres planted to corn.  “I think they will plant more corn in southern Brazil this fall,” he says.  “Which will eat into the soybean area and in Argentina they’ll plant more corn which eats into the soybean area.”

And, Cordonnier says South America is also facing a La Nina weather pattern.  “We might see a contraction in the acreage and then the smaller yield,” he says.  “So this idea that South America will always give us a record crop year after year is now broken.  And I think that is adding a lot to the soybean markets.”

Soybeans closed at more than one year highs Monday on concerns about South American crop damage.

AUDIO: Michael Cordonnier, Soybean and Corn Advisor