May 20, 2009

Global soy stocks are likely to fall sharply this season due to lower harvests in major South American soy exporting countries, Hamburg-based oilseeds analysts Oil World forecast on Tuesday (May 19).

Oil World said that world stocks of soy are set to decline steeply to a five-year-low of around 50 million tonnes at the end of this season, down by around 10 million tonnes from last year, adding that this will raise dependence on US supplies in the first half of next season.

It estimates the key US soy stocks will fall to 3.6 million tonnes at the end of August 2009, 100,000 tonnes down on its May 12 estimate and down from 5.58 million tonnes at end-August 2008.

The background is largely a fall in South American soy harvests in the five main exporters Brazil, Argentina, Paraguay, Bolivia and Uruguay to a combined 96.70 million tonnes in early 2009, down by 18.1 million tonnes on their combined crops last year.

Drought, especially in Argentina, has cut this year's harvests.

Oil World forecasts Argentina's 2009 soy crop will fall to around 33.0 million tonnes from 46.7 million tonnes last year and expects Brazil's to fall to 57.62 million tonnes from 60.02 million tonnes.

Argentina's March 2009-February 2010 soy exports are forecast to fall to only 4.70 million tonnes from 11.79 million tonnes in the same year-ago period.

The analyst said that world import demand for soy, soyoil and soymeal has partly shifted to the US origin in recent weeks due to insufficient South American export supplies.

It also said additional sales of US soy were made to China lately, adding that export sales of US soy were made to China and that export sales of US soyoil and soymeal have picked up notably.