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Latest South American soyabean crop estimates

At last week's HGCA/PGRO Oilseeds and Pulses conference in Peterborough, the importance of the final size of the 2009/10 South American soyabean crops on the world oilseed balance sheet was repeatedly stressed. The world oilseed balance sheet currently suggests a very large surplus but much of this is based on forecast-record Brazilian and Argentine soyabean crops being harvested. Given that soyabeans represent 60% of all the oilseeds produced in the world and there is over four times the amount of soyabeans produced worldwide than rapeseed, the implications for UK rapeseed price formation are clear. The UK rapeseed market takes a large amount of direction from the world soyabean market.

This week has seen further updated estimates of 2009/10 South American soyabean production entering the market. Private analyst firm Informa Economics have raised their estimate of the Brazilian soyabean crop to 66.5Mt (up 0.5Mt from last month's figure), while the Argentine crop forecast now stands at 54Mt (up 1Mt on last month). Analysts AgraFNP have also raised their estimate of the Brazilian crop from previously, pointing to strong yields seen in early harvest data. Around 5% of the Brazilian crop is believed to have been harvested already, with Agra FNP now seeing the total crop at 65.1Mt. The USDA is to release its updated crop estimates on February 9th.

Current estimates suggest the South American crop could be up to 35% above last season. These supplies, combined with the US crop of around 91.5Mt harvested in late-2009, come as a welcome boost to a market that was looking relatively tight in Autumn 2009. This was due to the delayed US harvest and supplies of old-crop South American soyabeans running low. Crushing levels in the market, especially in the US, have remained high while US exports, particularly to China, have also been impressive. However, these most recent figures still point to a world surplus of around 20Mt, with the USDA currently seeing ending stocks up around 17Mt.

Market focus is now moving towards possible planting decisions for next season, especially with potentially large world opening stocks in mind. Recent months have seen decreases to the soyabean/maize price ratio in the US, suggesting the incentive for US farmers to plant soyabeans may be lower. Early data and forecasts are now starting to emerge, with the US agricultural department, in preparing its budget projection for the next fiscal year, this week estimating that US farmers will plant 30.96Mha of soyabeans for the 2010/11 season, down 1% on this season. The first detailed projections of plantings will be released by the USDA on February 11th.

SA soya