February 15, 2012

Oil World slashes Brazil, Paraguay soy estimates

Oil World on Tuesday (Feb 14) slashed its 2012 soy harvest forecast for Brazil and Paraguay due to drought but boosted its estimate for Argentina.

The German oilseeds analyst said it had cut its forecast of Brazil's 2012 soy crop to 69.5 million tonnes from 70 million tonnes estimated on January 31 and 72.8 million it forecast in December.

Lack of rain means Brazil's crop would be well down on the 75.3 million tonnes it harvested in 2011.

Oil World also cut its forecast of Paraguay's soy crop to 4.6 million tonnes from six million tonnes estimated on January 31 and 8.3 million tonnes harvested last year. The forecast cut was also made because of drought.

It raised its forecast of Argentina's 2012 soy crop to 47 million tonnes from 46.5 million tonnes forecast on January 31 and 52 million tonnes forecast in December.

This would still be down on the 49.2 million tonnes harvested in 2011 in Argentina.

Recent rain had helped Argentine soy, Oil World said.

The US is the world's largest soy exporter, Brazil the second and Argentine the third. Paraguay is a smaller exporter but its volumes are important to world markets.

"The South American soy crop shortfall is going to raise the global dependence on US soy in both March/August 2012 and in September/January 2012/13," Oil World said.

"We expect increasing purchases of US soy from China and other countries in the months ahead."