February 22, 2010

US soy crush seen reduced on low meal exports

Strong competition from South American countries will sharply limit US soymeal exports for the 2010-11 marketing year, keeping the US soy crush lower than it has been in years.

The US is forecast to crush 1.655 billion bushels of soy in 2010-11, down 3.8% last year, the USDA said in a grains and oilseeds outlook released at its annual Agricultural Outlook Forum. If realised, that would be the lowest crush since the 2003-04 marketing year.

"The expected crush reduction is driven by lower projected soymeal exports as US crushers face unprecedented competition from record soy crops in South America," the USDA said.

The US is now forecast to export 8.8 million tonnes of soymeal for 2010-11, down from 10 million for 2009-10, according to the report released Friday (Feb 19).

The current Brazilian soy crop is estimated at 66 million tonnes, while Argentina's crop is pegged at 53 million, according to the USDA's February supply and demand report. In that report, USDA said Brazil is forecast to ship 12 million tonnes of soymeal in the current year and Argentina is seen exporting 26.95 million tonnes. Argentina is the world's largest exporter of soymeal.

US livestock production is expected to increase this year, but those additional animals aren't expected to consume enough soymeal to make up for the reduced export forecast, the USDA said Friday.

"Minimal expansion of US livestock herds and poultry flocks will limit projected gains in domestic soymeal usage to less than 1%," the USDA said.