According to University of Illinois agricultural economist Darrel Good, “Although in December 2011, the USDA judged total corn production prospects in Argentina and Brazil at 3.54 billion bushels, that forecast was reduced by 120 million bushels in January and by an additional 160 million bushels earlier this month.”

All of the reduction has been for the Argentine crop.

Similarly, combined soybean production in those two countries was forecast at 4.67 billion bushels in December, but was reduced by 90 million bushels in January and an additional 165 million bushels earlier this month.

Total precipitation has been well below average in southern Brazil since late January, suggesting that production there may fall short of the current forecast.

Expectations have been raised for a stronger export demand for U.S. corn and soybeans during the remainder of the 2011-12 marketing year and in the first half of the 2012-13 marketing year.

Good said, “Over the past two months, the USDA has raised the U.S. corn export forecast for the current year by 100 million bushels to a total of 1.7 billion bushels. The forecast is still 100 million bushels below the initial forecast made in May 2011 and 135 million less than exports of a year ago.”

He continued, “The forecast of U.S. soybean exports during the current year has declined steadily from the initial forecast of 1.54 billion bushels to the current forecast of 1.275 billion bushels, 226 million less than exported last year.”

Export progress is being carefully monitored for indications that shipments for the year might exceed current forecasts.

Export prospects for corn are especially important because year-ending stocks are expected to be small.