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Global soybean output raised

11/30/2012 @ 7:03am

The London-based International Grains Council Friday revised up its forecast for global soybean output in the current marketing year due to higher-than-expected yields in the U.S. and an expected record crop in South America.

Global soybean output is forecast to rise 12% to 267 million tons in the 2012-13 marketing year that began Oct. 1, the council said in a report. The council revised up its forecast for this marketing year by 3 million tons.

Soybean futures on the Chicago Board of Trade hit a record in September due to successive droughts in South America and the U.S., the world's largest suppliers. A rebound in output would likely drag down prices.

After initial delays due to dryness in central areas of Brazil, notably in Matto Grosso, the country's largest soybean producing state, recent precipitation has allowed plantings to advance, with farmers also replanting some of the fields, the council said.

If the weather remains favorable and the forecast 7% expansion of Brazil's soybean plantings is realized, the country's output will rise 20% to 80.5 million tons, it said.

In Argentina, output is projected to rise by one-third despite recent heavy rains and flooding to 54 million tons.

The rise in output will shore up global soybean inventories that were depleted earlier this year because of the droughts. Stocks in the three major exporting countries--the U.S., Argentina and Brazil--are forecast to rise 50% to 10.5 million tons.

The IGC raised its forecast for global trade in soybeans in 2012-13 by 1.2 million tons to a record 96.8 million tons. This would be a 5.1% on-year increase, which the council attributed largely to further strong demand growth from China.

The IGC forecast China's soybean consumption to rise 7% on year to a record 75.1 million tons in 2012-13, mainly due to stronger animal feed demand. It put China's soybean imports at a record 61 million tons, up 7% from 57 million tons in 2011-12.

The IGC said the global soymeal trade is also expanding. It forecast a 4% on-year rise to a record 59.1 million tons in 2012-13 due to strong demand in the European Union and East Asia.

It said soymeal imports by the European Union, the world's largest importer, will likely rise around 7% on year to 23 million tons on the back of tight supplies of alternative feed ingredients such as rapeseed, also known as canola. The EU is switching to direct imports of soymeal in lieu of buying soybeans, it said.

Soymeal exports by India, Asia's largest exporter, are forecast at 4.6 million tons, down from 5 million tons in 2011-12, the IGC said.

It forecast global canola output in 2012-13 to fall by 2% to a four-year low of 58.9 million tons due to lower output in Canada and Australia.

Write to Sameer C. Mohindru at sameer.mohindru@dowjones.com

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