October 2, 2007

South America 2007/08 soy seen up 10 percent to 130.4 million tonnes

South America should have around 130.4 million tonnes of soy available in the 2007/08 season, said Brazilian agribusiness consultancy Celeres on Monday.

The total supply figure, which includes carry-over stock from 2006/07, is 10 percent higher than the previous season.

New-crop production for 2007/08, however, was put at 119.7 million tonnes, up 4.1 percent from the previous season.

South America's top soy producers are Brazil, Argentina and Paraguay. The three nations will account for 54 percent of the world's soy output in 2007-08, up from around 49 percent in 2006-07.

The US is the world's leading soy producer, but is planting more corn in lieu of soy to feed national ethanol  demand. The US produces ethanol from corn.

"This is not going to be a massive South American soy crop so weather is going to be a key factor to keep these numbers where they are now," said Anderson Galvao Gomes, a senior commodities analyst at Celeres.

Gomes said traders and farmers should expect an active weather market this season, with many eyes following South American soy production for soy futures price moves.