September 22, 2010

Oil World sees ample global soy supplies

Global soy supplies in the new 2010/11 season are likely to be ample with a smaller crop still exceeding consumption and weaker prices likely, Hamburg-based oilseeds analysts Oil World said on Tuesday (Sep 21).

Oil World has raised its forecast of the global 2010/11 soy crop by 1.7 million tonnes from its previous August estimate to 258.92 million tonnes, above forecast global consumption of 256.40 million tonnes.

This would still be down from last year's record crop of 260.64 million tonnes while consumption will grow from 237.8 million tonnes last season.

"World supplies of soybeans will be ample in the first half of the new season, in September 2010/Feb. 2011. Global soy stocks at the start of the 2010/11 season will rise to 68.28 million tonnes from the 45.50 million tonnes at the start of 2009/10. A record soy crop of 94.79 million tonnes is also looming in the US, up from 91.42 million tonnes last season," it said.

"Initial harvesting has confirmed (US) soybean yields at the high end of expectations and partly even better, fuelling ideas that actual production may exceed the record 94.8 million tonnes estimated by USDA on September 10. We believe that soybean futures will have difficulties in sustaining the current high prices once harvesting expands and farmer selling picks up," it said.

Concern remains about dryness in key South American producers Argentine and Brazil, crucial to global supplies in the second half of the season, but Oil World has not changed its forecasts for the two countries.

Argentina's 2010/11 soy crop is likely to fall to 51 million tonnes from 55 million tonnes in 2009/10, it estimates. Brazil's 2010/11 soy harvest was likely to fall to 66.5 million tonnes from 68.4 million tonnes.

But it warned that South American crop prospects could deteriorate unless beneficial rain is received.

"Continued dryness in central and northern soybean growing areas of Brazil would lead to lower than intended plantings and unfavourable crop prospects," it said.