Global oilseed output set to hit record

 

 

World oilseed production will hit a record 440 million tonnes next season despite a drop in soy production, as growers turn increasingly to other oilseed crops such as rapeseed.

 

Global soy output will drop by nearly 8 million tonnes to 250.1 million tonnes in 2010-11, depressed by weaker yields in the US and South America, which enjoyed unusually benign conditions this season.

 

Farmers in Argentina, the third-biggest soy producer, will cut soy sowings to increase grain and sunflowerseed plantings, the USDA said in its first estimate for next season's global crop production and demand.

 

However, world oilseed production overall will be boosted by a rise of nearly 1 million tonnes in rapeseed production, 2.8 million tonnes in cottonseed output and 3.2 million tonnes in the sunflowerseed harvest.

 

According to the USDA, global production of high-oil content seeds, sunflowerseed and rapeseed, is projected to increase 5% from 2009-10, mostly due to increased harvested area.

 

Europe was set for "another bumper rapeseed crop" of 21.5 million tonnes, boosted by growing demand for rapeseed oil as a source of biodiesel.

 

The rise in output will be reflected in a rise of 1.8 million tonnes in world oilseed inventories as of the end of 2010-11. However, most of the increase will be felt in soy, for which production will remain ahead of consumption, notably in the US, the biggest producer of the oilseed.

 

America's soy stocks are expected to end 2010-11 at 9.9m tonnes (365 million bushels), some 680,000 tonnes (25 million bushels) higher than investors had expected.

 

Meanwhile, analysts view the increase as bearish, noting reports showing that US old crop soy will not be as tight as a large crop is expected. Rabobank said that US stocks estimate "combined with large South American supplies, should work to keep new crop soy prices on the defensive.

 

Nonetheless, soy for May delivery recovered early losses to stand 0.25 cents higher at US$9.53 a bushel in morning trade in Chicago, with the better-traded July contract up 0.25 cents at $9.61 ¼ a bushel.