World Grain - January 2013 - 20

GRAINMARKETREVIEW

Oilseeds

U.S. Gulf soybean export bids
FOB ($/MT)
700
650

Record production, trade
predicted as New Year begins

600

by Chris Lyddon

450

Oilseed production is set to break records, while international trade
is also at higher levels than ever. Even so, a quiet turn-of-year market
is jittery in the face of uncertainties over crops in South America and
worries over the role in the market of key buyer China.
The most recent International Grains Council (IGC) report puts
2012-13 soybean production worldwide at a record 267 million
tonnes, up from 238 million the year before. The latest ﬁgure was
raised 3 million tonnes on earlier estimates because of better than
anticipated U.S. yields.
“Nevertheless, as production there is still likely to decline, the
12% year-on-year rise in global output is centered on expected bumper crops in South America,” the IGC said.
A recent attaché report raised its estimate for Argentina’s soybean
plantings by 100,000 hectares to 19.8 million hectares, “due to the
reduction in area for sunﬂower seed that will now be dedicated to
soybeans.
“It is possible that area could increase up to 20 million hectares or
drop anywhere between 5% and 10% over the next couple of months,
depending on ﬁnal planted area and effects of diseases,” it said. “This
year Argentine cropland is experiencing differing conditions. In the
north, there is drought. In central-west Buenos Aires province (less
than 10% of total soybean area), there is ﬂooding, and in other areas
conditions are good.”
The IGC’s report predicted sowings would accelerate. “Assuming
a 4% rise in sowings, and much-improved productivity, output is projected to rise by one-third from the previous year’s drought-affected
outturn, to 54 million tonnes,” it said.
“After initial delays due to dryness in central areas of Brazil, notably in Matto Grosso, the largest producing state, recent precipitation allowed plantings to advance, with farmers also reseeding some
ﬁelds,” the IGC said. “Nevertheless, southern parts, particularly
Paraná and Rio Grande do Sul, remained dry and more rains are required to aid crop development.
“Assuming that weather patterns remain favorable, and the
forecast 7% expansion of plantings is realized, output in 2012-13 is
tentatively projected to recover strongly, by one-ﬁfth, to 80.5 million tonnes.”
Australia’s canola crop is expected to be lower, despite increased
planting, according to a recent attaché report.
“Back-to-back record wheat crops, coupled with lower prices received by farmers at the time of last year’s rain-affected wheat harvest, encouraged growers to shift area into canola,” the report explained. “Total area planted to canola reached a record 2.37 million

400

500

350
300
Dec-12
Sep-12
Jun-12
Mar-12
Dec-12
Sep-11
Jun-11
Mar-11
Dec-10
Sep-10
Jun-10
Mar-10
Dec-09
Sep-09
Jun-09
Mar-09
Dec-08
Sep-08
Jun-08

550

Source: U.S. Department of Agriculture

hectares in 2012-13, 23% higher than the previous year. However,
in response to less favorable seasonal conditions, average yield in
2012-13 is estimated at only 1.2 tonnes per hectare, signiﬁcantly
lower than last year’s record yield of 1.75 tonnes per hectare and
well below the ﬁve-year average of 1.5 tonnes per hectare.”
Total Australian production of canola seed in 2012-13 is projected
to be the second largest on record at 2.7 million tonnes, down from
last year’s record production of 3.2 million tonnes.
Harvest pressure from Australia was one reason behind a fall
in rapeseed prices at the French MATIF exchange in December. A
stronger euro against the dollar also pressured MATIF prices.
China, the world’s biggest soybean buyer, cancelled 840,000
tonnes of soybean purchases from the U.S. in one week in December,
triggering a 4.2% drop in Chicago futures prices, according to a Dec.
25 report by the Bloomberg news agency. It cited the newsletter Oil
World as saying that China is still dependent on U.S. supplies until
March and that it would have to replace the canceled orders.
The IGC has lifted its forecast for global trade in 2012-13 (Oct./
Sept.) slightly, to a record 96.8 million tonnes, up from 92.1 million
the year before.
“Both the upward revision and projected year-on-year growth of
5% are due to Far East Asia,” it said. “Deliveries there are set to expand to an all-time high of 72.9 million tonnes (68.9 million), three
quarters of the world total.
“This is mostly linked to a further expansion in shipments to
China, seen rising by 7% year on year, to 61 million tonnes, driven
by expanding demand for soybean products from both the feed and
food sectors.”
Chris Lyddon is World Grain’s European editor.
He may be contacted at: chris.lyddon@ntlworld.com.
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January 2013 / World Grain / www.World-Grain.com

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World Grain - January 2013

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