[Back]   [Comments]  [Print]

NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

23/03/2005

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

Grainnet.com

CATEGORY

HEADLINE

USDA Releases Oil Crops Yearbook Summary
Mar. 22 2005 - This summary is published by the Economic ResearchService, U.S. Department of Agriculture, Washington, DC 20036-5831. Thecomplete report will be available electronically about one week followingthe summary release.

Adverse Developments for Foreign Soybean Crops Keep U.S. Prices Aloft

The U.S. Department of Agriculture’s (USDA) forecast of 2004/05 soybeanexports was raised 35 million bushels this month to 1,045 million. If theforecast is realized, it would exceed the 2003/04 exports by 160 millionbushels. It would put only a modest dent into the prospective stockcarryout, which is still expected to be very large at 410 million bushels.Domestic soybean meal disappearance for 2004/05 was forecast lower thismonth from 33.7 to 33.4 million short tons. There is a slightly betteroutlook for U.S. soybean meal exports (at 5.9 million tons), although thatincrease will offset only half of this month’s reduction in domestic use.Soybean processors will therefore need to crush less to meet total soybeanmeal demand, and the 2004/05 crush was forecast down 5 million bushels to1,650 million.U.S. soybean prices in February 2005 were pushed up approximately $1 perbushel due to the abrupt reversal of fortune for the Brazilian crop. Theforecast of the 2004/05 average farm price was raised from $4.80-$5.40 to$5.05-$5.45 per bushel. Cash values for soybean meal jumped by more than$25 per short ton from the prior month toward $185 per ton. Consequently,USDA forecast a higher season average price of $160-$170 per ton.Similarly, cash prices for soybean oil rose about 4 cents per pound and byearly March were near 23.5 cents per pound. This led to a half-centincrease in the forecast of the 2004/05 average price to 21.0-23.0 centsper pound.A worsening drought led to a lower 2004/05 soybean yieldforecast for Brazil this month, which cut the production estimate from63.0 million to 59.0 million metric tons. The poorer prospective supplyalters the soybean demand outlook for Brazil, scaling back the exportforecast by 1.2 million tons to 21.1 million as U.S. sellers pick up moresales.Brazil’s ending stocks picture appears to be less burdensome than before,however, with an inventory of 20.9 million tons at the end of Septemberversus the previous forecast of 23.7 million. Combining that with a lowerprojected crop in Paraguay, global ending stocks are seen at 56 milliontons, down from last month’s estimate of 61.3 million but still well abovethe 2003/04 carryout of 37.5 million tons.For the 2003/04 marketing year, U.S. soybean acreage declined for thethird consecutive year to 73.4 million sown acres, down from the 74.0million in 2002. A summer of drought, unfavorably high temperatures, andsignificant damage by soybean aphids slashed the national average soybeanyield to just 33.9 bushels per acre in 2003. This was well below the 2002yield of 38.0 bushels and the smallest since 1993. The lower acreage andyield cut 2003 soybean production to 2,454 million bushels. With lowerbeginning stocks, total soybean supplies for the crop year plunged 331million bushels from 2002/03.Despite a strong start, U.S. soybean exportsfell to 885 million bushels in 2003/04 from 1,044 million in 2002/03.Processor rationing during the summer cut the 2003/04 domestic soybeancrush to 1,530 million bushels, well down from the previous year’s volumeof 1,615 million. Even with an extraordinary decline in soybean use in thesecond half of the crop year, season ending stocks were forced downward toa minimal pipeline level of 112 million bushels.The U.S. season-average farm price surged upward to $7.34 per bushelcompared with $5.53 in 2002/03. World oilseed production increased to 336million metric tons in 2003/04 from 330 million the prior year because ofimproved harvests of cottonseed, peanuts, sunflowerseed, and rapeseed.That increase was partly offset by a decline in global soybean output from197.1 million to 188.8 million metric tons. The poor U.S. soybean crop in2003/04 accounted for nearly the entire decline in world production. Thesoybean shortfall caused a slight decline in global use. World soybeanending stocks fell 8 percent in 2003/04 to 37.5 million tons as outputdeclined more than consumption.In Brazil, soybean area expanded by 16 percent to 21.5 million hectaresdue to higher prices. However, many producers’ expectations were dashed byan unrelenting drought that severely damaged yields throughout southernBrazil. Brazil’s 2003/04 soybean production was estimated at 52.6 milliontons, only marginally higher than the preceding crop. An interruption ofshipments to China limited soybean exports from Brazil to 19.8 milliontons in 2003/04 versus 19.7 million the previous year. Poor soybean yieldsalso offset an expansion of sown area in Argentina, dropping the country’soutput to 33.0 million tons from 35.5 million in 2002/03. The smaller croplowered 2003/04 Argentine soybean exports by 2 million tons from theprevious year to 6.7 million. Lower soybean meal demand in the UnitedStates, European Union, China, and other Asian countries trimmed worldconsumption by 1 percent in 2003/04 to 128.5 million tons. In at least 10Asian countries, a wide outbreak of avian influenza caused a greatupheaval of the region’s poultry sector. A financial crisis for processorsalso interrupted soybean imports into China, restricting the country’s2003/04 imports to just 16.9 million tons, down from 2002/03 imports of21.4 million.Global vegetable oil output increased 6.1 million metric tons in 2003/04to 100.8 million. The only major oil to have a decline in output wassoybean oil, which fell to 30.0 million tons from 30.3 million in 2002/03mainly due to lower U.S. production. However, world trade in vegetable oilslowed in 2003/04 as India (a major importing country) saw some of thebest improvement in output. India’s 2003/04 soybean oil imports declined40 percent to 0.8 million tons, while palm oil imports were trimmed to3.55 million tons (from 3.95 million in 2002/03).