February 11, 2009

US soy exports are forecast higher than expected this season and soy stocks lower due to drought hitting South American (SA) soy producers, Oil World analysts said on Tuesday (Feb 10).

Oil World has raised its forecast of US September 2008 to August 2009 soy exports to 31.5 million tonnes, up 500,000 tonnes from its last estimate on January 30 but still down from 31.7 million tonnes exported by the US in 2007/08.

It has also cut its forecast of end August 2009 US soy stocks to 5 million tonnes, also 500,000 tonnes down on its January estimate and down from 5.58 million tonnes at the end of August 2008.

It regarded 5 million tonnes as a minimum comfortable soy stock level for the US.

Oil World said there is a high risk that US soy stocks will be reduced to or below 5 million tonnes or 184 million bushels at the end of this season as US soy exports may be higher than expected as a result of the SA drought causing production losses.

Much would depend on developments in coming weeks including rain in Argentina and Brazil, the pace of SA farmer soy selling and development of Chinese soy import needs.

It also said a reduction of US soy stocks close to minimum pipeline requirements would raise the market dependence on a pronounced expansion in US soy plantings this spring, favourable weather in the US this summer and a sharp increase in US soy production.