May 23, 2012

US April-August soy exports to rise 3.3 million tonnes

As poor South American crops open up major sales opportunities for the US, April-August 2012 US soy exports to rise dramatically by 3.3 million tonnes on the year to nine million tonnes, Hamburg-based oilseeds analysts Oil World said on Tuesday (May 22).

"World demand has increasingly switched to US-origin in response to the dwindling South American supplies of soy and products," Oil World said.

High exports will help cut US soy stocks at end-August 2012 to 4.85 million tonnes (178 million bushels) from 5.85 million tonnes at end-August 2011, Oil World estimates.

The US is the world's largest soy producer and drought is expected to sharply cut 2012 soy crops in Brazil and Argentina, the second and third largest producers.

"The crop failure in South America will increasingly be reflected in reduced exports of soy and products in the months ahead," it said.

It added: "It is possible that Brazilian exports will still be relatively high in May, but from June onwards the on-year decline in South American shipments is seen accelerating."

Combined Brazilian, Argentine and Paraguayan soy exports in April-August 2012 will fall by 4.3 million tonnes on the year to 27.9 million tonnes, Oil World forecasts.

"South American farmers have already sold an unusually large share of their soy crops as the combination of high international prices and weak currencies has magnified the returns for producers," it said. "With unsold supplies of soy unusually low already this early in the South American crop season, many buyers will have no other choice than turning to the US".