November 23, 2011
Brazil's 2012 soy crop forecast has been raised by Oil World by one million tonnes after favourable weather, it said on Tuesday (Nov 22).
Oil World raised its forecast of Brazil's soy crop in early 2012 to 74.30 million tonnes, up from 73.3 million tonnes it forecast in October but still down from 75.10 million tonnes Brazil harvested in early 2011.
It estimates Argentina will harvest 52 million tonnes in early 2012, down from 53 million tonnes it forecast in October but still up from 49.4 million tonnes Argentina harvested in early 2011.
"Weather conditions and crop prospects have been favourable recently," it said of the Brazilian crop.
Argentinean farmers are believed to have switched from soy to corn sowings because of high prices and good sales prospects, it said. But it cautioned that the crop forecasts could only be achieved if the positive weather trend continues and above-average yields are achieved.
Fertiliser purchases by South American farmers have also reached record levels, indicating that farmers are making efforts to further increase yields, it said.
The US is the world's largest soy producer, with Brazil in second place, followed by Argentina. Argentinean government officials have said Argentina will produce up to 53 million tonnes of soy this season.
Brazilian analysts forecast a record 75.5 million tonnes crop in early 2012.
"During September 2011-February 2012 world supplies of soy will be sufficient to cover demand, particularly because lower than expected consumption of soymeal has slowed soy crushings in the US and Europe," it said.
But afterwards, the global market will become increasingly dependent on supplies from South American harvests.
"Deteriorating (South American) weather conditions and crop prospects would have a bullish impact on the market, because world soy stocks will be relatively small in early 2012," it said.