A global soyabean supply deficit is possible in 2007/08 with Brazil and Argentina unable to compensate for lost supplies as US farmers switch to corn cultivation for biofuels, Hamburg-based oilseeds analyst Oil World said in a report.
"There is the risk of a substantial production deficit of six to ten million tonnes next season because South America cannot offset the prospective massive decline in US soyabean production, while world soyabean crushings will continue to increase," it said.
Tight new crop fundamentals would dominate soyabean prices in the coming months, with soya markets likely to rise sharply on news of crop problems, it said. "(Nearby) world supplies will be higher than expected previously, mainly due to the much better South American production," it said.
"In Brazil many observers have raised their crop estimate to 59 to 60 million tonnes against 56.9 million tonnes last year. There is some uncertainty however in Argentina, as it is still unclear how much damage was done from the very heavy rainfall over an area of 3 to 4 million hectares at the end of March."
Oil World currently estimates Argentina's soyabean crop this year at 45.3 million tonnes from 40.9 million last year. "We have raised our estimate of world soyabean stocks to 66.3 million tonnes as of end August 2007, up sharply by 6.3 million tonnes from a year earlier," it said.
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