By Mark Weinraub
WASHINGTON, Feb 8 (Reuters) - The U.S. Agriculture Department cut its forecast for U.S. soybean exports by 2.8 percent on Thursday as top exporter Brazil is expected to take an even bigger share of the market amid rising crop expectations for that South American nation.
The government projected U.S. soybean exports at 2.1 billion bushels. The 60-million bushel decline marks the third straight month the government has lowered its outlook for U.S. soybean exports. The diminished export expectations followed a record harvest that lowered protein levels for the crop, which cut demand from top buyer China. "China is looking for a premium product, and they're willing to wait for that Brazilian crop to come in and pay a bit more for it," said Ted Seifried, chief ag market strategist for Zaner Group.
U.S. prices were about 40 cents per bushel too high to spark Chinese interest, Seifried added.
USDA on Thursday also raised its outlook for both the Brazilian harvest and exports by 2 million tonnes.
Brazil, with a projected record 69 million tonnes of soybean exports, would handle 45.4 percent of the global market compared to the U.S. share of 37.6 percent
The only time the U.S. had a smaller market share was the 2012/13 marketing year, when a crop-wasting drought ate into final yields and lowered the amount of supplies available for overseas shipment. U.S. soybean exports that year accounted for just 36.0 percent of the global market.
Chicago Board of Trade soybean futures closed higher on Thursday, with traders quickly shrugging off the export cuts even amid expectations that plentiful global supplies could further reduce U.S. market share.
"The numbers on the soybean side for the export drop... we think there may be a little bit more to go in the coming months," said Rich Nelson, chief strategist with Allendale.
This year's Brazil harvest, which the USDA forecast at 112 million tonnes, was expected to be large enough to make up for any shortfalls from rival Argentina. Farmers in Argentina, the world's third biggest soybean exporter, were struggling with hot and dry conditions in some key growing regions.
USDA maintained its outlook for Argentine soy exports despite cutting its crop forecast by 2 million tonnes to 54 million tonnes. The Buenos Aires Grains Exchange on Thursday lowered its estimate of Argentine soybean production to 50 million tonnes. (Additional reporting by P.J. Huffstutter and Karl Plume in Chicago; editing by Diane Craft)
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