MercoPress. South Atlantic News Agency

Mercosur soy bean reserves stand at a minimum

Global oilseeds supply depends on a good US crop

South America’s soy bean reserves suffered a strong reduction following recent sales while the global supply could be affected depending on the US crop and weather in the northern hemisphere according to Oil World latest forecast

The oil seed reserves from Brazil, Argentina, Paraguay and Uruguay (Mercosur members) the region’s main producers and exporters, stood at 53.1 million tons on July first which is 20 million tons below the same date a year ago, pushed mainly by increased sales and milling.

“US soy reserves are expected to reach a minimum towards the end of August, which could cause difficulties for future deliveries in the first two to three September weeks, particularly if the crop suffers delays”, adds the forecast.

Brazilian reserves stand at 27 million tons from 35 million in July 2008. This was caused by a boost of sales during June, 6.2 million tons compared to 3.54 million tons a year ago, spurred by the high prices of last year’s crop.

In Argentina reserves are down to 24.2 million tons from almost 35 million tons in July 2008, said Oil World. Based on these figures export estimates for the rest of the year until February 2010 are forecasted in 1.3 million tons compared to the 7.2 million tons of the same period a year ago.

“Argentina farmers could act cautiously and make few deals in the coming weeks, since they are not short of money given the high level of operations in recent months”, said the report.

Following the results of the mid term elections at the end of June Argentine farmers are hopeful that Congress could reduce export taxes on grains and oilseeds over which they have clashed with President Cristina Fernandez de Kirchner administration for the last 18 months negatively altering planting decisions and activities.