June 27, 2012

As South American soy production recovers from the previous year's drought, global oilseed output may jump 8.4% in the next season, Oil World said.

World production of 10 oilseeds may climb to 471.9 million tonnes in the 2012-13 year beginning September 1, up from a revised estimate of 435.2 million for 2011-12, the researcher said Tuesday (June 26) in an e-mailed report. Farmers worldwide may harvest 273.9 million tonnes of soy, up 15% from a year earlier, while rapeseed output may increase 2.3% to 61 million tonnes.

Brazil's soy production may total 78.5 million tonnes, rebounding from 66.4 million a year earlier when drought hurt crops, Oil World said. Argentina's harvest may climb to 55 million tonnes from 40.5 million, while output in the US may rise to 87.8 million from 83.2 million. The US, Brazil and Argentina are the world's biggest growers of the oilseed.

"Farmers in South America will clearly favour soy plantings at the expense of grains," Oil World said. "With normal weather there should also be much less acreage abandonment, and we expect that the soy area available for harvest will increase steeply."

Soy supplies will remain tight during the first half of the 2012-13 season because South American harvests will not begin until 2013, Oil World said. Global stockpiles may drop to 54.7 million tonnes on August 31, before rising the following year to 61.7 million, the second-lowest number since 2008-09.

Dry weather in the US may also hurt developing soy crops, especially if conditions persist until August, when plants enter the pod-setting and filling stages, Oil World said.

"It has become unfavourably dry and hot in several parts of the Midwest and the southeast, reducing soil moisture supplies and resulting in deterioration in soy and corn crop conditions," Oil World said. "This is reason for concern, primarily for corn which had entered its important stage of pollination. There is still time for improvement for soy."