September 30, 2009

US exports of soy, soyoil and soymeal are expecting to rise sharply from October, but will not be able to offset a sharp decline in South American supply, according to Hamburg-based oilseeds analysts Oil World on Tuesday (Sept 29).

Delayed harvesting in several parts of the US has contributed to a shortage of soy supplies at US export locations, but Oil World expects the situation to reverse in coming months as harvesting pace picks up.

Due to the prospective sharp increase in US soy crushings and exports, November soy futures are considered undervalued at the moment and a recovery is expected in the medium term, Oil World said in a weekly report.

The record pace of US soy disposals would reduce total US soy stocks to a five-year low by the end of February 2010.

Oil World's current US soy stock estimate for end February 2010 is 34.7 million tonnes, down from 37 million tonnes at end-February 2009.

It said that Argentine and Brazilian soy stocks were unusually low as of end August, with some crushing plants closing due to a lack of soy supplies.

This would result in a sharp decline in South American exports in Oct/Feb 2009-10 which could not be offset by the US or other supplying countries, Oil World said.

World soymeal supplies will continue to be scarce until early 2010, which will keep soymeal prices high, it said.