MercoPress. South Atlantic News Agency

South American bumper soy beans crop to push prices down

Demand is also expected to increase boosted by China

The specialized publication Oil World raised its forecast for the world 2009/2010 soy beans crop in 47.6 million tons compared to the previous season, totalling 258.9 million tons. The upward estimate is boosted by the South American crop which will be 37 million tons larger than the 134 million tons of the 2008/09 harvest.

The South American crop refers mainly to Mercosur members, Brazil, Argentina, Paraguay and Uruguay.

Oil World also increased the world demand forecast pushed by China and totalling 234.4 million tons. The misbalance is expected to be reflected in international prices pushing the down the soy bean, flour and oil in the coming weeks, unless climate conditions and crop forecasts in the United States change dramatically.

Currently the US soybean crop conditions are favourable with an anticipated sowing season and abundant humidity in the soil. Furthermore is spite the US crop, which is considered “tight” Oil World estimates that the global scenario is for falling prices given the strong South American harvest and reserves.

World Oil also made an upward revision for its global production estimate for 7 oilseeds to 429.2 million tons in 2009/10, up from the previous estimate and 42.4 million tons from last season's drought-reduced crop.

Although world stocks of 7 oilseeds were unusually small at only 59.3 million tons at the start of this season, the record production will propel global supplies to a new high of 488.6 million tons in 2009/10, up 32.2 million tons from last season.

World supplies of soybeans are set to increase by even 33.8 million tons or 12.5% to a record 304.7 million tons this season. All other oilseeds, taken as a group, will show a contraction due to sharply lower production of sun-flower seed, groundnuts and cottonseed.