Continuing an unbroken string of 11 years of soybean area increases, in 2001/02 the usual factors pushing soybean area are being augmented by this season's climatology. Soybeans continue to be a low-cost crop to plant, especially GMO soybeans, and prospective returns to producers are higher than for alternative crops. Since June, Argentine soybean exports and, consequently, producer incomes, have been given an additional boost with the "devaluation" of soybean exports. Instead of being pegged to the U.S. dollar, prices for soybean exports are pegged to the average of the U.S. dollar and the Euro, resulting in an effective devaluation of roughly 8 percent.
This month, USDA's forecast for Argentine soybean area in 2001/02 rose 0.1 million hectares to an even higher record of 11.1 million. This month's increase is a result of farmers shifting away from corn. In October, heavy rains in central Argentina reduced planting intentions for corn and delayed planting. In November, the rains continued, but with some open days for fieldwork to progress. Soybean planting has an advantage over corn, as soybean planting can occur later in the season than the planting operation for corn.
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