March 2, 2009

US farmers may reap a record crop of soy in the year ahead and export sales are forecast to hit an all-time high, the USDA said on Friday (Feb 27).

USDA said soy production could reach 88 million tonnes, up 9 percent from last year and topping the 2006 record of 86.8 million tonnes.

USDA also said fertiliser prices have fallen recently but remain historically high, making less input -intensive crops such as soy a preferable alternative for producers, especially outside the higher-yielding Corn Belt states.

According to analyst estimates, Argentina and Brazil's soy output is expected to fall about 10 percent from last season, due to the drought.

South America would not have ample soy supplies for export until the spring of 2010 when it harvests a new crop.

US soy exports could reach a record of 33.3 million tonnes, up 6.5 percent from last year and topping the 2007/08 record of 30.45 million tonnes.

USDA said the growth hinges on whether China's livestock production continues to increase, as China is the world's largest soy importer, accounting for about half of all international trade.

Despite strong exports, US ending stocks are forecast to rise more than 80 percent from the current year to 10.3 million tonnes, the highest level since 2006/07.

High feed costs and slowing meat sales hurt livestock producers for much of 2008, prompting cutbacks in production.

With the exception of 2008/09, domestic soy crush will be at its lowest level since 2003/04.