Grains powerhouse Argentina lacks the soybean reserves needed to compensate for potential U.S. supply bottlenecks cause by low Mississippi River levels, putting the spotlight on neighboring Brazil, where harvesting has already begun.
U.S. barge shippers have worried over recent days about slowdowns on the drought-reduced Mississippi River. Traders look toward the Southern Cone when logistical problems crop up in the United States, which is the world's No. 1 soybean exporter.
But with less than one million tonnes of beans in reserve, Argentina will mostly stay out of the supply chain until the country's 2012/13 crop starts getting harvested in March, said local market experts and a trader at a major export company.
Brazil is also running low on 2011/12 soybeans. But some harvesting of the 2012/13 crop has begun with the bulk of the crop expected to be brought in February, a good month ahead of Argentina.
"Argentina had a major drought that reduced its 2011/12 crop and the new harvest will not start for another two months," said the Buenos Aires-based trader, who asked not to be named.
"The Argentine crushing industry is operating at 60 percent capacity, so I don't expect the Mississippi situation to have an effect on what we do," he said.
So the onus for meeting the South American supply is falling on No. 2 world soybean exporter Brazil, the trader and other market sources said.
Argentina, the world's top exporter of soyoil and meal and its No. 3 supplier of soybeans, has 0.9 million tonnes of beans left from the 2011/12 season, according to the Rosario grains exchange.
"Beans are running low and the farmers who have reserves are not seeing prices attractive enough for them to sell what they have left," said Patricia Bergero, an analyst at the exchange.
Soybean futures were pushed down on Wednesday by forecasts of a record-busting Brazilian crop.
The country will produce 82.7 million tonnes of soybeans in early 2013, government agency Conab said, raising its forecast from the 82.6 million tonnes it estimated in December and well above the 66.5 million tonnes harvested last season.
Brazil exported just 135,000 tonnes of soybeans in December due to the weak 2011/12 crop, compared with 1.47 million from December of 2011.
The U.S. Department of Agriculture on Friday is also expected to raise its forecast of Brazil's soybean harvest by 0.9 percent from last month to 81.8 million tonnes, according to a Reuters poll. (Additional reporting by Caroline Stauffer in Brazil; Editing by Theodore d'Afflisio)