December 19, 2006

USDA: US soy production unchanged, global palm oil output up


There were no changes this month to the 2006-07 forecasts of US soy production, demand, or ending stocks.


Soy exports for Q1 of the 2006-07 financial year totalled 371 million bushels, up 65 million from the 2005-06. Similarly, domestic processors crushed an all-time record in October of 161.7 million bushels of soybeans.


However, the forecast of the national average farm price was raised this month to US$5.70-6.50 per bushel from US$5.40-6.40 previously.


Soy prices continued to rise throughout November, although not as rapidly as in October, according to agency report.


The 2006-07 export outlook for soybean oil increased by 17 percent in October this year to 1,350 million pounds, says the USDA report. Despite the robust October demand, the output surge pushed up soybean oil stocks to 3,035 million pounds.


Even with a plentiful supply, the price for soybean oil surged to a November average of 27.6 cents per pound from 24.8 cents in October. A sharp increase in worldwide vegetable oil demand has diminished the price-depressing effect of these large stocks. Reflecting this, the USDA raised its forecast range of the 2006-07 average price to 26.0-29.0 cents per pound from the prior 24.0-28.0 cents.


As regarding the global outlook, USDA expects the Argentine soy area cultivation to rise to 15.7 million hectares, up from the previous forecast of 15.4 million and last year's 15.2 million.


As of mid-December, about 65 percent of the soy area has already been planted, says the report.


Apart from rising international prices, government suspension of corn exports can also be attributed to additional soy planting in Argentina.


In tandem with soybean oil, crude palm oil prices in Malaysia are up by more than one-third since the start of 2006, says the agency report. Accelerating world demand for biodiesel is providing extra impetus for the upward trend.


Global palm oil output for 2006-07 was forecast up this month to 39 million tonnes, compared with 36 million for 2005-06.


For the full USDA report, please click here

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