U.S. set to win new soybean sales due to small South American crops, say Oil World analysts
HAMBURG, Jan 25 (Reuters) - Smaller soybean crops expected in key South American producers are likely to push major soybean export business to the United States from June onwards, Hamburg-based oilseeds analysts Oil World said on Tuesday.
Oil World estimates the combined soybean harvests in the current 2021/2022 season in Brazil, Argentina, Paraguay, and Uruguay will fall to about 186.3 million tonnes, down by 7.4 million tonnes from the last season, and a four-year low.
Amid uncertainty about final crop sizes after unfavorable weather ranging from drought to excessive rain, South American farmers may also be restrained sellers in coming months, keeping more soybeans in stock as a hedge against inflation, Oil World said.
“U.S. farmers will benefit, as buyers in the importing countries will increasingly shift to U.S. soybeans from June or July onward, with the biggest increase on the year likely to occur in September/December 2022,” Oil World said.
“But already in the next few weeks, export sales of U.S. soybeans are likely to pick up for shipment in the second half of this season as well as for next season.”
Oil World forecasts Brazil’s soybean crop will fall to about 135 million tonnes from 138.5 million tonnes last year. It estimates Argentina’s crop at around 42 million tonnes from 43.8 million tonnes last year.
Reduced world soybean harvests will also result in lower-than-expected global soybean imports and crushings this year, it said.
“The major effect will be on soymeal and it is therefore likely that soymeal prices will strengthen relative to soy oil in the next three to six months,” Oil World said. (Reporting by Michael Hogan. Editing by Bernadette Baum.)
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