June 15

 

Brazil and Argentina rising stars in soy and corn exports

 

 

Higher soybean production and exports are projected for both Brazil and Argentina due to increased area in both countries, according to a USDA report on World Agricultural Demand and Supply Estimates released Jun 11.

 

Despite increased corn planting, higher soy area is projected for Argentina as producers increase second crop soybean production and continue to expand plantings on to pasture land.

 

The Brazil crop is projected at 61 million tonnes , up 2 million from the revised estimate for 2006/07 while the Argentina crop is projected at 47 million tonnes , up 0.5 million from the revised 2006/07 crop. Production in both countries once again will be record high.

 

For the US, soy ending stocks at 2006/2007 is projected at 320 million bushels, 50 percent down from last year's levels. Soy production is expected to decline due to more areas given to corn planting.

 

While soy prices have gone up this month, soymeal prices have gone unchanged and soyoil prices were only up 1 cent.

 

Meanwhile, US oilseed production is also declining.

 

Global oilseed production, at 399 million tonnes is down 1.3 percent, the first year to year decline in 10 years. Most of the reduction is due to lower production  in the US as producers reduced planted area sharply from 2006/07

 

This can be seen from the fact that oilseed production outside the US is projected at 315 million tonnes, up 7 million tonnes from 2006/07.

 

Global production of high-oil-content seed is up 5 percent from 2006/07 reflecting sharp increases in rapeseed production. Rapeseed production is projected sharply higher in the EU due to  increased demand for biodiesel. Production is also projected higher for Canada, India, and Australia.

 

Lower global sunflowerseed production is mainly due to smaller crops projected for EU and Ukraine. China is expected to have lower soy, rapeseed, and peanut production this year.

 

Global protein meal consumption is projected to increase 3.9 percent in 2007/08, much of it attributable to China and most of the increase can be attributed to increased soymeal usage.

 

Meanwhile, US corn exports are expected to be lower in 2006/07, as can be seen from the slower pace of shipments in recent weeks and more competition from larger supplies in Argentina.

 

The 2006/07 corn price projection is lowered 10 cents on the top end of the range to $3.00 to $3.10 per bushel.

 

Corn production is raised 0.5 million tonnes  each for Argentina and Brazil.

 

Production in Argentina is raised to 22.5 million tonnes  based on higher yields whereas production in Brazil is projected at 50 million tonnes, reflecting higher summer yields and increased winter corn area.

 

Argentina is seen to increase corn exports by one million tonnes and the EU is expected to increase by 200,000 tonnes. The combined total would nearly offset a 1.3 million- tonne reduction in US corn exports.