June 11, 2004

USDA Forecasts Record Brazil Soy Output For 2004-05 Of 66 Million MT

Brazil is expected to produce a record-breaking soybean crop of 66 million metric tons for the 2004-05 marketing year, the U.S. Department of Agriculture said Thursday in its monthly supply and demand report.
 
The current forecast for 2003-04 Brazilian soybean production is just 52.6 million metric tons, down from USDA's May estimate of 53.5 million, April estimate of 56 million, March estimate of 59.5 million and February estimate of 61 million. Poor weather conditions there, a drought in southern producing regions and the country's struggle with the Asian rust fungus are blamed for the decline by analysts.
 
But the USDA said Thursday in its June report: "Improved yields and prospective increases in harvested area, especially in Brazil, will push South American soybean production to a record 113 million tons, accounting for just over half of 2004-05 global production. The Brazilian soybean crop is projected at a record 66 million tons, up 25% from the drought-reduced 2003-04 crop."
 
Due to the strong competition expected to come from Brazil and other South American countries, the USDA said it lowered U.S. soybean and soymeal exports in 2004-05.
 
"A projected increase in 2003-04 soybean ending stocks for South America is expected to provide increased export competition for U.S. soybeans and soybean meal export prospects," USDA said in the June report.
 
The USDA said it lowered its 2004-05 U.S. soybean export forecast by 15 million bushels to 1.065 billion. The forecast for U.S. soymeal exports was lowered 5.55 million short tons, down from last month's prediction of 5.9 million.
 
With less exports expected, the USDA said it raised its forecast for 2004-05 soybean ending stocks by 30 million bushels to 220 million. Traders and analysts expected an increase, but most thought it would not be more than 200 million.
 

Source: USDA