May 9, 2012

Reduced soy harvest to curb global soymeal exports

Poor soy outputs forecasts, particularly in Brazil and Argentina, are expected to lower world soymeal export supplies in coming months, Hamburg-based oilseeds analysts Oil World said on Tuesday (May 8).

Soy has a high meal content of 79-80%, Oil World said. So soyoil production losses can be more easily covered by other vegetable oils than losses to soymeal supplies to the global animal feed industry, it said.

"The sharply reduced South American soy production is going to curb crushings and is likely to result in a decline in world exports of soymeal," Oil World said.

"Also, world trade in soy will be curtailed, curbing soy crushings in most importing countries, with the major exception of China."

Oil World on Tuesday cut its forecast of Argentine's soy crop for the second time in two weeks by 1.5 million tonnes.

Estimates of South American soy production are being cut as weather damage to crops becomes more apparent.

Chicago soymeal contracts have slipped from contract highs reached on Apr. 30 but remain well supported, Oil World said.

Argentine FOB soy export prices touched record levels in early May, it said.

There is a risk that the average utilisation of the Argentine crush capacity will fall to below 50% in the second half of this season, so cutting soymeal export supplies, it said.

Tight global soymeal supplies are also being felt in India, where export prices have also touched record levels and more measures may be needed to stimulate domestic Indian oilseed production, Oil World said.