March 28, 2012

World end-August soy stocks lower in 2012

Lower-than-anticipated soy crops will result in reduced global end-August 2012 soy stocks, from 76.10 million tonnes in August 2011 to 60.60 million tonnes, Hamburg-based oilseeds analysts Oil World forecast on Tuesday (Mar 27).

"Demand rationing will become necessary in the second half of this season," Oil World said.

Chicago soy futures rose to a 6-month high on Monday (Mar 26) as diminishing crop prospects in South America and the potential loss of acreage in the US to corn helped fuel investor appetite for the oilseed.

Poor South American harvests are the major reason why Oil World estimates global 2011/12 soy production will fall to 242.91 million tonnes from 265.62 million tonnes in 2010/11.

The 2011/12 soy production would be below Oil World's estimated 2011/12 global soy consumption of 258.41 million tonnes comprising 224.73 million tonnes of crushing and 33.68 million tonnes of other use.

Oil World on March 20 cut its forecast of Brazil's 2012 soy crop to 66.5 million tonnes from 75.3 million tonnes in 2011 and reduced its forecast of Argentina's 2012 crop to 46.5 million tonnes from 49.2 million in 2011. It estimates Paraguay's 2012 crop at 3.70 million tonnes, down from 8.37 million tonnes.

"Some observers suggest that our current soy crop estimates are still 1.0-2.0 million tonnes too high for Argentina, 0.5-1.0 million tonnes (too high) for Brazil and 0.2 million tonnes for Paraguay, it said.