The global soy market will become increasingly dependent on South American supplies in coming months due to a lower-than-expected US soy crop, according to Hamburg-based oilseeds analyst Oil World on Tuesday (November 4, 2008).
The USDA on October 28 reduced its forecast for US soy crop by 1.5 percent. Oil World said the downward revision has reduced northern hemisphere oilseed production below earlier expectations, and will increase global dependence on South American supplies in the second half of this season.
Brazilian soy this season will decline to 60 million tonnes from 60.1 million tonnes last season, while Paraguay's crop will fall to 6.6 million tonnes from 6.81 million tonnes, said Oil World.
Argentina's crop is expected to increase to 49.5 million tonnes from 47 million tonnes last season.
Despite higher plantings, these estimates may be optimistic due to persistent soil moisture deficits and sharply reduced fertiliser application, said Oil World.
Oil World added that market players will become increasingly focused on South American weather and crop prospects from now on.