September 2, 2010

Global 2010/11 soy consumption to exceed forecast

The global 2010/11 soy crop usage is likely to reach 257.27 million tonnes, above estimated season consumption of 253.8 million tonnes, Hamburg-based oilseeds analysts Oil World forecasted Tuesday (Aug 31).

This compares with 2009/10 output of 260.7 million tonnes and consumption of 237.3 million tonnes.

Despite the sharp rise in estimated 2010/11 consumption, global soy stocks, a key price factor, were likely to rise to 72.3 million tonnes at the end of 2010/11 from 68.83 million tonnes at the end of 2009/10.

"We expect soy prices to trend lower in the coming months and widen the discounts to rapeseed and sunseed," the forecast said.

A big US crop will be followed by lower South American harvests while soy demand will remain strong partly because of lower global rapeseed harvests.

"In the soybean market, prices are torn between a benign US crop and an ample world soybean supply outlook, remaining production risks and unusually strong demand," it said.

Oil World expects a 2010/11 US crop of 93.4 million tonnes, up from 91.4 million tonnes last season and the same level as forecast by the USDA on August 12. Argentina and Brazil are both likely to harvest lower soy crops in early 2011 as dry weather is hitting soy in both countries. Argentina's 2010/11 soy crop is likely to fall to 51 million tonnes from 55 million tonnes in 2009/10, it estimates. Brazil's 2010/11 soy harvest was likely to fall to 66.5 million tonnes from 68.4 million tonnes.

The uncertain picture with South American crops meant caution was still needed when assessing the global 2010/11 supply and demand balance, it said.