The Associated Press

A drought that damaged crops in South America may send more buyers to the U.S. for soybeans, the government says.

The U.S. Agriculture Department on Tuesday cut its forecast for soybean supplies by 25 million bushels. It expects that by the end of the growing season the supply will total 250 million bushels. The USDA predicts that exports will total 1.29 billion bushels this year.

The agency is leaving unchanged its forecast for corn inventories and exports. But analysts expect overseas demand for corn to be strong.

The agency says corn supplies could increase because farmers got an early start on planting, which should help the crop during the growing season. In addition, softer demand is expected from ranchers and ethanol producers.

Copyright 2012 The AP.

Recommended for you