World processing of 10 oilseeds may slow from April to September on tightening supplies as adverse weather in South America may damage crops, Hamburg-based researcher Oil World said.
Global oilseed processing may rise by 2.4 percent from a year earlier in the April-to-September period, the researcher said in a report today. That compares with a year-over-year gain of 5.1 percent from January to March and an increase of 3.8 percent from October to December. Oil World said it may cut its soybean crushing estimate of 114.1 million metric tons for the April-to-September period.
“There is a risk that our estimates of soybean crushings, and also of soya oil and meal output, are still at the high end,” Oil World said. The “latest reports from Brazil, Argentina and Paraguay point to a relatively high probability that actual production must be reduced further.”
Soybean output in Brazil, Argentina, Paraguay and Uruguay may reach a three-year low of 118.4 million tons, Oil World estimated on March 23. “There is now an increasing risk” that production may be as much as 3 million tons smaller, it said today. Colder-than-normal temperatures have slowed plant development after drought this year, the researcher said.
Soybean futures jumped to a six-month high of $14.16 a bushel on the Chicago Board of Trade on March 30, after the U.S. Department of Agriculture said farmers may plant 73.9 million acres this year, down 1.4 percent from a year earlier and less than analysts expected.
Soybeans to Outperform Corn
“USDA’s forecast does not fully reflect the final intentions of U.S. farmers,” because the government survey of growers took place in the first two weeks of March before soybean prices extended gains, Oil World said. “We expect soybean prices to continue outperforming corn,” the researcher said.
Weather conditions and prices through May “will be key determinants of actual plantings,” Oil World said. “Generally benign weather and soil moisture conditions in major U.S. growing areas speak for an early start of corn sowing, possibly at the expense of soybeans, which are planted later.”
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