October 11, 2010

 

US soy estimates drop as rains fail to increase yields

 

 

The USDA's soy harvest estimates may be 2.2% lower than the month-ago forecast after August rains failed to boost yields and the government reduced its acreage estimates.

 

The crop will total a record 3.408 billion bushels (92.8 million tonnes), compared with 3.483 billion projected in September and 3.359 billion gathered last year, the USDA said today.

 

"We are going to shift the focus to planting progress in South America, where dry weather is a concern, and to the pace of US exports," said Anne Frick, a senior analyst for Prudential Bache Commodities LLC in New York.

 

Soy futures have climbed 17% in the past year on record Chinese purchases and reduced production in Russia and parts of Europe. The November contract rose US$0.03, or 0.3%, to US$10.65 a bushel on CBOT.

 

The soy crush spread - the value of the animal feed and cooking oil derived from a bushel of soys, minus the cost of the oilseed - has fallen 15% from a year ago.

 

Yields are forecast at 44.4 bushels an acre, compared with 44.7 bushels projected in September and a record 44 bushels a year ago. Analysts had projected a yield of 45 bushels.

 

About 76.823 million acres will be harvested, the USDA said, down from 77.986 million estimated in September and up from 76.372 million a year earlier. The department also lowered its estimate for planted acreage to 77.7 million from 78.9 million.

 

Reserve supplies before next year's harvest will total 265 million bushels, down from the September estimate of 350 million, the USDA said. The surplus on August 31 was 151 million bushels, up from 138 million a year earlier.

 

Cash prices will average US$10.75 a bushel in the crop year that began September 1, up from last month's estimate of US$9.90 and up from US$9.59 in the previous year, the USDA said.

 

World production in the crop year that began October 1 will total 255.3 million tonnes, the USDA said, up from 254.9 million forecast a month ago. Output in the previous year was a record 259.9 million tonnes.

 

World inventories next year before the North American harvest are estimated at 61.4 million tonnes, down from 63.6 million forecast a month ago and up from 60.4 million on September 30.