Oil World has cut its forecast of the global 2008/09 soyabean crop to 239.5 million tonnes, down 1.8 million tonnes from its July estimate, the Hamburg-based oilseeds analysts said on Tuesday. This would still be up by around 17 million tonnes on the 2007/08 crop. "World production prospects for soyabeans have deteriorated during August due to dryness in major growing areas of the US Midwest," it said.
But the US 2008/09 crop, the world's largest, is still forecast to rise to 80.90 million tonnes from 72.40 million tonnes last season as farmers have planted a larger area. "A deterioration has also occurred in South America," it said. "In our assessment, the outlook is more critical than market participants apparently believe at the moment."
"Central and northern Argentina are suffering from a severe drought - in some provinces regarded as the worst in the last 40 years." It still estimates Argentina's 2008/09 soyabean harvest will rise to 51.00 million tonnes from 47.50 million in 2007/08 when farmers also planted more to take advantage of high prices.
Brazil's harvest is forecast to virtually stagnate at 60.70 million tonnes against 60.30 million tonnes last season. Oil World forecasts global 2008/09 soyabean consumption will be slightly above production at 239.60 million tonnes. Global 2008/09 soyabean stocks are likely to end the season at 60.8 million tonnes, down slightly from 60.85 million forecast at the start of the season.
PALM OIL OUTPUT UP Global October 2008-September 2009 palm oil production will rise to 44.60 million tonnes from an estimated 42.27 million tonnes in 2007/08, Hamburg-based oilseeds analysts Oil World said on Tuesday. This would be above estimated world 2008/09 consumption of 44.35 million tonnes, which is up from 41.32 million forecast for 2007/08.
This would raise 2008/09 season ending stocks to 6.60 million tonnes from 6.35 million at the end of 2007/08, it said. "The steep decline in palm oil prices in recent weeks is a reflection of high production growth rates and rising stocks," it said. Palm oil prices have fallen by about 14 percent so far this year.
"World production increased by an estimated 15 percent on the year in April/June and is seen rising by 9 to 10 percent in July-September 2008," Oil World said. Palm oil's comparatively low price compared to other vegetable oils is currently keeping global demand high, it said. "Exports remained high in August, preventing an accumulation of burdensome stocks," it said.
"However, some buyers tried to get out of contracts made when prices had still been high to reduce their losses after the recent price erosion." But it still forecasts global palm oil stocks will rise by between 300,000 to 400,000 tonnes in July/September 2008. This would mean end-September 2008 stocks will be up about 800,000 tonnes on the year at 6.3 million to 6.4 million tonnes.