(USAGNET) – The International Grains Council has slashed its 2021-22 global soybean production estimate, citing dwindling yield potential in drought-hit South America.

In its latest monthly Grain Market Report on Thursday, the IGC put total estimated global soy production at 353 million tonnes, down 15 million from the agency’s January forecast and now 4% below the previous year. The biggest cuts were to Brazil – down 10.5 million tonnes from January to 126.5 million, while estimated Argentina output was dropped 2.5 million to 41.5 million.

Farms.com reports that the IGC’s estimates are now more in line with more recent private estimates, particularly for Brazil. On the other hand, the USDA’s February estimates put Brazil production at 134 million tonnes and Argentina at 45 million.

With the downgrade in production, the IGC in turn reduced its 2021-22 global soybean consumption estimate to 363 million tonnes, down from 371 million in January and 367 million the previous year. If accurate, it would mark the first time projected annual soy consumption has declined in a decade. Trade is also forecast lower this month, down 6 million tonnes to an estimated 161 million – steady from a year earlier.

Global soybean ending stocks for 2021-22 are pegged by the IGC at 43 million tonnes this month, compared to 52 million in January and 53 million the previous year.

Looking ahead to 2022-23, the IGC is tentatively projecting a 2% year-over-year increase in global soybean acreage, including gains in major exporters.

The IGC lowered its world corn production just slightly this month, down to 1.203 billion tonnes from 1.207 billion in January but still up from 1.132 billion in 2020-21. Ending stocks are seen at 281 million tonnes, versus 287 million in January and 277 million a year earlier.

Worldwide wheat production was left steady from January at 781 million tonnes, while ending stocks ticked up 2 million to 278 million.