Soybean crops in key South American producers Brazil and Argentina will increase in 2005 but the rise will not be as large as some have forecast, Hamburg-based newsletter Oil World said.
It currently estimates Brazil will harvest 60.0 million tonnes in early 2005 against 49.8 million tonnes in early 2004.
This would involve 22.2 million hectares of Brazilian soybean plantings against 21.2 million hectares previously.
"In our assessment total Brazilian soybean plantings will fall short of earlier expectations," it said. "We would not be surprised to see total plantings at around 22.0 million hectares."
It said: "In Argentina, Brazil and Paraguay farmers have become more reluctant to plant soybeans due to the bumper US crop, the cost/price squeeze and the risk of spreading the Asian rust fungus."
"We consider it likely that the soybean crops in South America will turn out lower than currently expected in the market."
Brazilian weather in the next few weeks will be important, it said.
"As soybeans can be planted until a later date, we could also see some switch from corn to soybeans if beneficial rain arrives in November," it said.
It estimates Argentina's 2005 crop at 36.5 million tonnes from 32.0 million tonnes previously. Argentina's plantings were forecast to rise to 14.50 million hectares from 14.40 million hectares.
Some Argentinean farmers were likely to switch to sunflowers, it said.