"The increase in global use will be led by China, where expanding food and feed consumption will spur the need to process more oilseeds," the council said in a report.

China's soybean consumption is projected to rise 6% this year to 75.1 million tons, it said.

China has more than a 60% share in global soybean imports and demand continues to rise, but the IGC said global soybean production is also set to recover after back-to-back droughts in major exporting regions the U.S. and South America.

Global soybean output is forecast at a record 271 million tons this marketing year, up 14% from 2011-12.

"The forecast expansion is entirely dependent on a rebound in South America's output," the IGC said.

Last month's below-average rainfall in Brazil's key soybean-producing state of Mato Grosso was not expected to hurt output prospects due to earlier rains, and the harvest has already started, it said.

Brazil's soybean acreage has expanded by around 9% this year, and production is forecast to rise 25% to a record of almost 83 million tons, the IGC said.

Plantings in Argentina, another major exporter, are more than 90% complete, while a 4% expansion in acreage is expected and production is forecast at a record 54 million tons, it said.

"Less supply from the U.S. is more than compensated for from the dramatic rebound in South American output," the council said.

U.S. soybean sales have been brisk in the current marketing year that began Sept. 1, and by early this month, export shipments and commitments of around 31 million tons had already been made, the IGC said. This is up 27% on year and equals around 85% of the year's projected total U.S. soybean exports.

Buyers will now turn to South America to secure their supply, the IGC said.

Global trade in soymeal is also expanding and is forecast to rise 4% this year to a record 59.2 million tons due to strong demand in the European Union, where rapeseed output has declined in recent years, it said.

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

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(END) Dow Jones Newswires

January 21, 2013 06:47 ET (11:47 GMT)