Feb. 28 (Bloomberg) -- Global oilseed stockpiles will drop 16 percent to a three-year low in the current 2011-12 crop year as demand increases and dry weather in South America cuts soybean production, Oil World said.
Inventories will fall to 74.1 million metric tons from 88.4 million tons in 2010-11, the Hamburg-based researcher said today in a report. Consumption will rise 3.3 percent to 449.7 million tons, it said. Global output faces a “major slowdown” in the second half of 2011-12 after a La Nina weather system cut soybean crops in Brazil and Argentina, Oil World said.
“The global production deficit of seven oilseeds will become more severe than expected a month and two months ago,” the researcher said. “Soybean crop losses have become considerably greater in South America, primarily in southern Brazil owing to drought.”
Soybeans have gained 8.3 percent this year on the Chicago Board of Trade because of the dry weather in Brazil, expected by the U.S. Department of Agriculture to be the biggest exporter of the oilseed this year. Rapeseed traded on ICE Futures Canada in Winnipeg is up 8.9 percent.
Soybean production will fall 7.3 percent globally and rapeseed output may drop 1.5 percent to a three-year low of 59.8 million tons, Oil World said. It predicted smaller rapeseed crops in the European Union, the U.S., Ukraine, China and India.
The decline for rapeseed will be limited by record harvests in Canada, where growers will gather 14.4 million tons, and Australia, which will produce 3.05 million tons, according to the researcher.
“Still, prices of rapeseed and oil have been trading at premiums over competing commodities so far this season as a result of insufficient supplies,” Oil World said.
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