The X factor, of course, is Brazil's ability to contain the spread of soy rust. In fact, that's a growing concern in both the Northern and Southern Hemispheres.
Soybean rust already has struck Australia, Asia, Africa and South America. In South America last week, farmers became concerned over rising cases of rust. Also worrisome was recent heavy rainfall that prevented them from spraying fungicide to treat the fungus. The soybean crop was devastated by similar circumstances last year.
This year, farmers are alert to even the smallest risk. And, the rust has been successfully controlled so far. Soybean crops in Brazil are returning excellent early harvest yields. According to the latest Agriculture Ministry estimate, the country's number one soybean producing state will harvest 16.2 million tons in 2004-05. The USDA is projecting almost 4 billion bushels of soybeans will be harvested in South America based on yield projections of 41 bushels per acre.