July 28, 2006

 

Brazil's soy crushers maintain 2006/07 crush at 28.2 million tonnes

 

 

The Brazilian Vegetable Oils Industry Association (Abiove) maintained its soy crush estimate on Thursday for market-year 2006/07 at 28.2 million tonnes as of Jul 26. The figure is down from 28.5 million tonnes on May 31 and Abiove's 28.9 million tonne estimate in April.

 

The 28.2 million figure, to be sold in 2006 and early 2007, is from the 2005/06 soy crop Abiove actually lowered in its previous estimate to 56.1 million tonnes.

 

Abiove's estimate is the highest made so far for Brazil's 2005/06 crop. The official estimate by the Agriculture Ministry put the crop, already harvested and being sold, at 53.8 million tonnes. Other private estimates suggest an even smaller crop due to adverse weather conditions, Asian soybean rust, and low yields.

 

Brazil's 2006/07 soy crush will be the lowest since market year 2003/04, when the crush total was 27.7 million tonnes.

 

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 sound 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 June were put at 20.6 million tonnes compared with 19.8 million tonnes a few weeks ago, showing very little movement in the local market even as government subsidies have enticed farmers to sell in June. The 20.6-million-figure is the lowest purchase volume of soybeans since 1997, when 18.8 million tonnes were purchased between February and June.

 

June purchasing volume fell in comparison to May, but was higher than the average of the past four years at 798,000 tonnes. May purchases were 2.6 million by comparison and June 2005 purchases were 590,000.

 

Soy crush, however, continues to flounder in comparison to previous years at 2.3 million tonnes, the lowest sine 2001 when 2.2 million tonnes were crushed in June. In May, Brazil crushed 2.2 million tonnes and in June 2005 the crush total was 2.8 million tonnes, close to the 2004 record for June at 2.85 million tonnes.

 

 

Soy export estimates

 

Abiove maintains its soy export estimate again at 25.2 million tonnes in market year 2006/07 compared with 22.3 million tonnes estimated for market year 2005/06.

 

Roughly 11.7 million tonnes of soybeans have been shipped between February and June, according to Abiove. Brazil shipped 2.3 million tonnes to world markets in June compared with 3.2 million in May. It is the lowest export volume of soybeans in the past three years.

 

Soymeal export targets remain fixed at 12.6 million tonnes in market year 2006/07, compared with 13.9 million tonnes of soymeal in market year 2005/06.

 

Roughly 3,9 million tonnes of soymeal have been shipped between February and June.

 

Soyoil exports were maintained at 2.2 million tonnes compared with 2.6 million tonnes in market year 2005/06.

 

Soyoil exports between February and June were put at 806,000 tonnes.