September 26, 2013

As harvests accelerate in the Northern Hemisphere and production is set to rise in South America, global oilseed crushing probably will climb to a record in the next season.

This is according to Hamburg-based researcher Oil World in an e-mailed report.

About 401.08 million tonnes of 10 major oilseeds will be processed in the 2013-14 season that begins October 1, up from 387.07 million tonnes a year earlier. Oilseeds including soy and rapeseed are crushed by processors to make vegetable oils and meal used to feed livestock. World production of seed oils probably will rise by 3.7 million tonnes from the previous year, while meal output will climb by 10.1 million tonnes, according to the Oil World report.

"With harvesting of large oilseed crops gaining momentum in the Northern Hemisphere in coming weeks, the global oilseed industry is gearing up for a record crush volume," Oil World said. "This estimate is also based on the large oilseed crops shaping up in the Southern Hemisphere, which are still subject to many uncertainties."

Soy futures fell 7% this year on the Chicago Board of Trade as the USDA predicts world harvests will climb to a record 281.7 million tonnes as production expands in South America and US crops recover from last year's drought. Rapeseed futures on NYSE Liffe in Paris slid 21% amid rising production in Europe, Canada and Ukraine.

Oilseed processing in China will rise 1.6% from a year earlier to 90.72 million tonnes, "still significantly trailing the country's huge crush capacity," Oil World said.

Crushing in Brazil may climb 10% from the previous year to 41.08 million tonnes, while processing in Argentina rises 9.8% to 40.2 million tonnes, Oil World said. Brazil is the world's top soy exporter and Argentina ranks third, after the US While South American farmers usually start planting soy in the next few weeks, major growing areas of both countries have experienced dry weather recently, Oil World said.