3/22/05 - February soybean prices in U.S. were $1 per bushel higher onmonth due to a drop expected in the Brazilian crop, the Oilseeds Outlookof the U.S. Department of Agriculture said Monday. It said U.S. soyexports are seen higher at 1,045 million bushels over earlier1,010-million-bushel estimate due to an abundant 2004 crop in the country.
"A worsening drought led to a lower 2004-05 soy yield forecast for Brazilthis month, which cut production estimate to 59 million tonnes fromprevious 63 million," said the report.
Despite the lower output projection, Brazil's 2004-05 (August-May) soycrop will still be huge compared with 49 million tonnes a year ago.
However, the lower Brazilian soy output--and hence a drop inexports--vis-a-vis previous estimates have boosted U.S. soy prices.
The forecast of the average soybean price for the current U.S. crop yearending June has been raised by $1 per bushel to $5.05-5.45, the reportsaid.
Cash prices of soymeal have already jumped by over $25 per tonne on monthto $185 per tonne. Consequently, the USDA has forecast a higher seasonaverage price of $160-170 per tonne.
Similarly, soyoil cash prices rose about 4 cents per pound (1 pound--450grams) in early March to 23.5 cents. This price rise led USDA to increaseits forecast by 0.5 cent per pound to 21.0-23.0 cents.
The latest forecast by USDA of a 35-million-bushel hike in U.S. soybeanexports during the current crop year is largely due to an increase indemand from China.
This hike would take the year's soy exports to 1,045 million bushelsagainst the previous year's 885 million bushels.
BRAZIL SOY SUPPLY
A lower projection of soy supply from Brazil alters the crop's demandoutlook for the country. The export forecast has been scaled down by 1.2million tonnes to 21.1 million tonnes.
Further, the Brazilian soy inventory at the end of the crop year inSeptember is now pegged at only around 20.9 million tonnes against theprevious estimate of 23.7 million tonnes, USDA said.