February 14, 2012

South American harvest cuts may benefit US oilseed producers

US oilseed manufacturers are seen to benefit from recent cuts in South America's 2012 soy yield soon to be reaped and marketed in competition against the US 2011 harvest.

Dry weather has reduced area and yield that will adversely impact export availability in the coming months.

This production decline along with record October-December exports and crush has reduced forecast supply six million tonnes from the previous year and 10 million tonnes from the December forecast. With global import demand expected to be three million tonnes higher than last year for the 2012 January-September period, there should be ample opportunity for the US to carve out additional sales.

In contrast, the US is expected to have ample supplies ready for export in September 2012. With South American supplies on September 1st expected to be down nearly nine million tonnes from last year, it is extremely unlikely that we will see a repeat of the 50% drop in US export volume (15 million tonnes) in the September - December period.