By Bloomberg News April 12 (Bloomberg) -- Soybean prices may decline on growing evidence that larger output in Brazil and Argentina, the world’s second and third-largest producers, will see supply outpace demand, Oil World said. Prices of U.S. soybeans arriving in Rotterdam may fall to “significantly below current levels” to around $350 a metric ton in the second half of the 2009-2010 marketing year, Thomas Mielke, managing director of trade magazine Oil World, said in a report given to reporters before a conference. They averaged $428 in the six months beginning Oct. 1, he said. Futures prices in Chicago have fallen 8.7 percent this year on expectations of record harvests in Brazil and Argentina, the largest growers after the U.S. The U.S. Department of Agriculture last month predicted the countries together will produce a record 120 million metric tons this year, 35 percent more than last year. Global soybean output may exceed demand by 20 million tons in 2009-2010, said Mielke, who spoke at a conference in Beijing today organized by the China Cereals & Oils Business Net. Still, vegetable oil supply will not be able to meet demand as the beans are mostly used to produce meal for animal feed, he said. Additionally, Argentina and Brazil farmers are slowing sales after a drop in prices, he said. There will be “too much” meal in the second half of this marketing year due to increased crushing, putting pressure on prices of animal feed, Mielke said. Soybean oil is also supported by the “firmness in palm oil,” he said. With crude oil at $80-$90 a barrel, the biofuel market will support vegetable oil prices, Mielke said. Soybeans for May delivery rose as much as 1 percent to $9.6125 a bushel on the Chicago Board of Trade, and were at $9.575 at 1:59 p.m. Singapore time.

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