June 2, 2006
Brazil's Abiove lowers 2006/07 soy crush estimates to 28.5 million tonnes
The Brazilian Vegetable Oils Industry Association (Abiove) lowered its soy crush estimate Thursday (Jun 1) for market year 2006/07 to 28.5 million tonnes, down from 28.9 million tonnes in its May 3 estimate.
The 28.5 million figure, to be sold in 2006 and early 2007, is from the 2005/06 soy crop Abiove puts at 56.4 million tonnes, and is lower than the 29.7 million tonnes estimated to be crushed in the 2005/06 market year. If the estimate proves correct, it will be lowest soy crush total since market year 2004/05, when 28.9 million tonnes of soybeans were crushed into soyoil and soymeal.
The current soy crush estimate is for the month of April and considers the commercial year from Feb 2006 to Jan 2007.
April's soy crush total rose to 2.2 million tonnes compared with 1.93 million tonnes in March. However, the total is the lowest registered for the month since 2001, when 2.27 million tonnes of soybeans were processed, Abiove calculated in their monthly report.
Brazil's soy crush has been shrinking over time due to a financial transaction tax levied on interstate soy shipments that makes shipping the raw material more financially viable than adding value to soy by turning it into meal and oil.
As a result of the tax, known as ICMS in Brazil, Brazil's soy crush has lost its competitive edge to Argentina, Abiove maintains, because soy crushers would be taxed on the arrival of the soy to their processing units and taxed again on shipping the oil or meal to port states.
Industrial purchases of soybeans from February to April are put at 17.2 million tonnes, the worst purchasing volume for this time of year in over 10 years.
Low carryover stocks from the previous drought-ridden soy season coupled with an unfavourable foreign exchange rate has led soy farmers to hold out for better prices. The US dollar continues to weaken against the Brazilian real. Brazilian soy, like all internationally traded commodities, is priced in dollars. Local soy prices have fallen 6 percent in Sao Paulo between M
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Soy export estimates
Abiove maintains its soy export estimate for the third month in a row at 25.2 million tonnes in market year 2006/07 compared to 22.3 million tonnes estimated for market year 2005/06.
Soymeal export targets were lowered this month to 12.9 million tonnes in market year 2006/07, compared with 13.2 million tonnes in their previous report. Brazil should export 13.9 million tonnes of soymeal in market year 2005/06.
Soyoil exports were reduced for the third month in a row, and are now put at 2.25 million tonnes compared with 2.35 million tonnes in last month's report. Soy oil exports are still targeted at 2.6 million tonnes at this time for market year 2005/06.
