May 6, 2009

Hamburg-based oilseeds analyst Oil World again cut its forecast of Argentina's 2009 soy crop, this time by two million tonnes, because of dry weather.

Argentina's 2009 soy crop is now forecast at 34.50 million tonnes, down from the previous forecast of 36.50 million and from 46.7 million harvested in 2008.

The forecast is also 5.5 million tonnes lower than Oil World's April 14 estimate.

Oil World said with harvesting completed on about 71 percent of the area on April 29, it is clear that the damage from heat and drought was more severe than expected.

Oil World's forecast is still above the 34 million tonnes forecast by the Buenos Aires Grains Exchange on April 29.

The analyst said the smaller crop is likely to cut Argentine September 2008-August 2009 soy exports to only 7.4 million tonnes against 14.3 million tonnes in the same year-ago period, adding that reduced Argentine export supplies were likely to support global soy prices and focus buying interest on US supplies.

The analyst also said that due to reduced Argentine soy production and exports, its US soy export forecast was raised to a record 34.0 million tonnes or 3,250 million bushels for September 2008-August 2009, which is likely to reduce US soy stocks to a minimum level of 3.7 million tonnes or 4.5 percent of annual usage.

It added that this would be down from US end-August 2008 soy stocks of 5.58 million tonnes following US 2007-08 season soy exports of 31.7 million tonnes.