The world soybean harvest may fall the most ever in the 2011-12 crop year as dry weather slashes production in South America and the U.S., Oil World said.
Output may drop a record 19 million metric tons from the prior period to 246.5 million tons, the Hamburg-based researcher said in a report today. Output will tumble 13 million tons in the Southern Hemisphere to a three-year low of 125 million tons and slide 6.7 million tons to 121.4 million tons in the Northern Hemisphere, according to Oil World.
“Soybean prospects deteriorated considerably in South America,” Oil World said, forecasting a “staggering” decline in the global harvest. “Considerable crop losses have already occurred, partly exceeding 40 percent.”
The oilseed has gained 8.3 percent this year on the Chicago Board of Trade, rebounding from a 14 percent retreat in 2011, as a La Nina weather system cuts production in South America. Global soybean stockpiles are poised to fall 18 percent to 62.6 million tons, the report showed.
Soybean production in Brazil, expected by the U.S. Department of Agriculture to be the biggest exporter in the crop year, may fall 9.1 percent to 68.5 million tons, Oil World said. The harvest in the U.S., the second-biggest shipper, will fall 8.2 percent, according to the report.
“In Rio Grande do Sul, soybean areas received only scattered rainfall during Feb. 1 to Feb. 23, while temperatures were above normal,” Oil World said, referring to the Brazilian state. “While beneficial rains were received lately in many parts of Argentina, production prospects deteriorated considerably in Brazil and Paraguay.”
Output also is set to fall in China, the biggest global soybean importer and consumer, Oil World said. The country’s crop will decline 8.7 percent to 13.6 million tons, according to the report. Global processing of the oilseed will rise 2.1 percent to 226.2 million tons, the researcher said.
The production shortfall in South America will increase dependence on U.S. inventories, according to the report. U.S. shippers will export 10.6 million tons of soybeans from March through August, up 18 percent from the prior year, Oil World said.
“The crop failure in South America will raise the world market’s dependence on U.S. supplies,” the researcher said. “We already expect some shift to occur from now on, resulting in a year-on-year increase of U.S. soybean exports. An even larger shift to U.S. origin is likely to occur in September to February, the first half of next season’s U.S. crop year.”