BK: World oilseed harvest to hit record 440m tonnes
World oilseed production will hit a record 440m tonnes next season despite a drop in soybean production, as grower turn increasingly to cottonseed, rapeseed and sunflowers.
Global soybean output will drop by nearly 8m tonnes to 250.1m tonnes in 2010-11, depressed by weaker yields in the US and South America, which enjoyed unusually benign conditions this season.
Farmers in Argentina, the third-biggest soybean producer, will cut soybean sowings "to increase grain and sunflowerseed plantings", the US Department of Agriculture said in its first estimate for next season's global crop production and demand.
However, world oilseed production overall will be boosted by a rise of nearly 1m tonnes in rapeseed production, 2.8m tonnes in cottonseed output and 3.2m tonnes in the sunflowerseed harvest.
"Global production of high-oil content seeds, sunflowerseed and rapeseed, is projected to increase 5% from 2009-10, mostly due to increased harvested area," the USDA said.
Europe was set for "another bumper rapeseed crop" of 21.5m tonnes, boosted by growing demand for rapeseed oil as a source of biodiesel.
US inventories rise
The rise in output will be reflected in a rise of 1.8m tonnes in world oilseed inventories as of the end of 2010-11.
However, most of the increase will be felt in soybeans, for which production will remain ahead of consumption, notably in the US, the biggest producer of the oilseed.
"[America's] soybean crush for 2010-11 is projected to decline 5%," the USDA said, noting increased competition from Argentina and India in the soymeal export market.
"Sharply lower US soybean meal exports are only partly offset by a small increase in domestic soybean meal use."
America's soybean stocks are expected to end 2010-11 at 9.9m tonnes (365m bushels), some 680,000 tonnes (25m bushels) higher than investors had expected.
Price reaction
This increase was viewed as "bearish" by analysts at broker Allendale, with US Commodities saying that the report showed that US "old crop soybeans will not be as tight, and a large crop is coming".
Rabobank said that US stocks estimate "combined with large South American supplies, should work to keep new crop soybean prices on the defensive".
Nonetheless, soybeans for May delivery recovered early losses to stand 0.25 cents higher at $9.53 a bushel in morning trade in Chicago, with the better-traded July contract up 0.25 cents at $9.61 ╪ a bushel.
