February 16, 2009
 

ASA Weekly: Brazil, Argentina soy 2008-09 crop reduced

In its February World and United States commodity supply, demand, trade and price updates last week, the US Department of Agriculture reports 2008-09 season estimates with changes reflecting non-United States production adjustments and trade developments. No production adjustments or reported quarterly stocks/inventory levels on US soy were incorporated for 2009-10 reported as usual.

Anticipated soy supply/use estimate adjustments were the market focus going into this report, with Brazil and Argentina as the driving forces for crop reductions. USDA cut its estimated production in these two countries by 7.7 million tonnes (Brazil down 2 million tonnes to 57 million, Argentina down 5.7 million tonnes to 43.8 million) and further cut other South American production by 1.4 million tonnes for an aggregate drop of 9.1 million tonnes. Accompanying this production drop was a 5.2 million tonne use reduction with estimated ending stocks outside the United States lowered by 3.7 million tonnes.

In the United States soy supply/use balance, estimated crush was reduced 35 million tonnes, exports increased 50 million tonnes and ending stocks lowered 15 million to 210 million tonnes. Softer US domestic usage headlined the US soymeal balance with domestic use and exports sharing the moderated soyoil offtake.

Last week's USDA updates imply sufficient old-crop supplies with moderated South American harvest prospects most notably increase the focus on 2009 season production prospects, which will become increasingly a market focus over the next 60-90 days. At its February 26-27 outlook forum, USDA will release updates of its new-crop balance sheets that should better reflect the likely 2009 acreage mix and demand prospects for the 2009-10 marketing year.