Reduced supplier and Bank of Brazil credit has prompted South American contacts and agricultural consultancy groups to reduce their 2009 soybean planting prospects from a 5% expansion this summer-to 2.5%-3% increase earlier this fall-to only a minimal to no increase in seedings this week. Credit constraints can also reduce this year's yield potentials, as producers stretch their higher cost fertilizers over more acres to conserve their funds and have adequate monies for soybean rust controls later this growing season in Brazil. Dryness cutting wheat seeding and high fertilizer costs for corn are expected to boost Argentina's soy plantings by 10% this year, but the ongoing strife between producers and Buenos Aires over export taxes could reduce this forecast too.

Because of these factors, the U.S. Department of Agriculture's (USDA's) current total 113 mmt crop for Brazil and Argentina could be 3 mmt to high. This level would reduce this region's current larger supplies by 50%, even without any weather concerns-which could occur if an El Niño condition would build this winter in the Pacific Ocean. These smaller supplies could also shave the USDA's current rise in world bean stocks to 56.3 mmt back to this fall's 52.7 mmt. Adding to 2008/09's output concerns is the current U.S. field reports of disappointing yields, which could cut the U.S. yield another half bushel to three-fourths bushel by the January U.S. crop report. Hold beans sales for $10.40-$10.80 price recovery.  

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