By Jeff Wilson March 10 (Bloomberg) -- The U.S. soybean crop is smaller than estimated in January, though still a record, the government said, after surveying farmers in four southern states where rain delayed the harvest late last year. About 3.359 billion bushels were collected, down from 3.361 billion estimated in January, the U.S. Department of Agriculture said today after reassessing harvests in Georgia, North Carolina, South Carolina and Virginia. Analysts surveyed by Bloomberg News expected 3.349 billion, on average. “These are minor adjustments and help to tighten supplies a bit further,” Brian Grete, the senior market analyst for the Professional Farmers of America newsletter in Cedar Falls, Iowa, said before the report. “The weather for planting crops in the U.S. will now take center stage” for determining price direction, Grete said. A smaller crop may increase feed costs for livestock producers such as Tyson Foods Inc. and Smithfield Foods Inc., while benefiting oilseed processors including Archer Daniels Midland Co. and Bunge Ltd. Production was bigger than the 2.967 billion bushels collected in the previous year and more than the prior record harvest of 3.197 billion in 2006. Futures Fall Soybean futures for May delivery yesterday slid 0.5 cent to $9.475 a bushel on the Chicago Board of Trade, after reaching $9.35, the lowest price for a most-active contract since Feb. 10. The commodity has fallen 9.6 percent this year on U.S. forecasts for record production in Brazil and Argentina. The average acre will yield 44 bushels of soybeans, the USDA said, unchanged from January. The yield was 39.7 bushels per acre in the previous harvest. About 76.4 million acres (30.9 million hectares) were harvested, the USDA said, unchanged from 76.4 million estimated in January and more than the previous year’s 74.7 million. Reserve supplies before the next harvest were projected at 190 million bushels, down from the previous forecast for 210 million, the USDA said. Analysts expected 193 million bushels, on average. The surplus on Aug. 31 was 138 million bushels, the second-smallest since 1977. The department also revised its estimate for inventories of the oilseed on Dec. 1. to 2.33 billion bushels, down from 2.34 billion estimated in January. Overseas demand is projected at 1.42 billion bushels for the marketing year that began Sept. 1, up from last month’s forecast for 1.4 billion and from 1.283 billion in the previous year. U.S. processors will convert 1.73 billion bushels of soybeans into animal feed and vegetable oil, up from last month’s estimate of 1.72 billion and up from 1.662 billion in the previous year, the department said. Cash prices will average $9.45 a bushel for the marketing year, unchanged from last month’s forecast and down from $9.97 in the previous year, the USDA said. Prices averaged a record $10.10 in the 2007-2008 season. World production in the crop year that began Oct. 1 will be a record 255.9 million metric tons, up from 255 million tons forecast a month ago and up from 210.9 million produced in the previous year, according to the report. The crop forecast for Brazil, the second-largest grower, was raised to 67 million tons, from 66 million last month. Argentina, the third-biggest producer, will produce 53 million tons, unchanged from February, the USDA said. World inventories of the oilseed on Sept. 30 will be 60.7 million tons, up from 59.7 million forecast in February and up from 42 million a year earlier, the USDA said. “The world supply situation is much more comfortable that it was last year,” Grete said. To contact the reporter on this story: Jeff Wilson in Chicago at jwilson29@bloomberg.net

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