Production forecast down for third straight month; but stockpiles in line with previous years.

WASHINGTON — The U.S. Department of Agriculture lowered its forecast for Argentine soybean production in its March World Agricultural Supply and Demand Estimates report because of persistent dryness.

The revised production prospects for Argentine soybeans were down significantly from previous projections. The U.S.D.A. forecast 2017-18 production at 47 million tonnes, down 7 million tonnes, or 13%, from the previous month’s projection and off significantly from the previous two years: 19% lower than the 2016-17 outturn of 57.8 million tonnes and 17% lower than the 2015-16 outturn of 56.8 million tonnes.

The U.S.D.A.’s lower forecast for Argentine soybean production followed a trend that began in January’s report with a 1-million-tonne reduction, a 1.7% drop, followed by a 2-million-tonne (3.6%) decrease in February.

Yield prospects for 2017-18 Argentina soybean production were lowered based on heat, dryness and low soil moisture recorded through much of the growing region during the January-February flowering period. The U.S.D.A. forecast an average yield of 2.61 tonnes per hectare, an 11% decrease from the prior month’s projection, and down 17% from the previous year.

The lower 2017-18 soybean crush forecast that accompanied the decreased production numbers for Argentine soybeans was far less drastic. Using data adjusted to an October-September marketing year, Argentina’s domestic crush estimate for 2017-18 was lowered 1.5% from the previous month to 43 million tonnes but remained within a narrow range of crush estimates from the previous two years.

The U.S.D.A. lowered its forecast for Argentine 2017-18 soybean ending stocks to 31.2 million tonnes, down 3.8 million tonnes, or 11%, from the previous month, down 14% from 2016-17 ending stocks at 36.22 million tonnes and down 1.2% from 31.6 million tonnes in 2015-16.

The U.S.D.A. forecasts for 2017-18 soybean meal production, exports and ending stocks in Argentina were lowered from the previous month but unchanged or higher than for other recent years, which suggested significant stockpiles could mitigate the effects of a smaller crop.

The U.S.D.A.’s soybean meal production forecast for Argentina in 2017-18 was 33.28 million tonnes, down 200,000 tonnes from the February projection, but even with the previous year.

For the first time since August, soybean meal export forecasts for Argentina were lowered. The U.S.D.A. forecast 2017-18 exports at 30.8 million tonnes, down 400,000 tonnes from the February projection and down 1.7% from 31.32 million tonnes in 2016-17.

The U.S.D.A. forecast Argentina’s 2017-18 soybean meal ending stocks at 2.81 million tonnes, up 260,000 tonnes, or 10%, from the February projection. The ending stocks forecast was 16% lower than 2016-17 ending stocks of 3.33 million tonnes and 35% lower than 4.23 million tonnes in 2015-16.

The U.S.D.A.’s forecast for Argentine soybean oil production in 2017-18 (adjusted to an October-September marketing year) was lowered for a second straight month. Production was pegged at 8.4 million tonnes, down 44,000 tonnes from February, but even with 2016-17 production and 30,000 tonnes lower than in 2015-16. Argentine soybean oil ending stocks in 2017-18 were forecast at 200,000 tonnes, unchanged from February. Argentine exports of soybean oil in 2017-18 were forecast at 5.12 million tonnes, 380,000 tonnes lower than the February projection and compared with 5.39 million tonnes in 2016-17.