World Grain - November 2011 - 22

GRAINMARKETREVIEW

Oilseeds
IGC forecasts 6% increase for global soybean trade in 2011-12
by Chris Lyddon
Soybeans recovered from sharp falls in September with traders reporting demand from bargain hunting Chinese buyers. Meanwhile, macroeconomic uncertainty is affecting the European rapeseed market. Oilseed rape production for next year is expected to be stimulated by price, but there are emerging concerns over growing conditions in Germany and parts of Eastern Europe. In its most recent World Agricultural Supply and Demand estimates report, the U.S. Department of Agriculture (USDA) projected global oilseed production for 2011-12 at 453.47 million tonnes, up 490,000 from last month. The USDA estimate for 2010-11 is 452.78 million tonnes. Global soybean production is projected at 258.6 million tonnes, down 400,000 mainly due to the lower U.S. crop. That compares with 264.12 million tonnes in the previous year. The International Grains Council (IGC) forecasts a 6% increase in soybean trade volume to a record 96.8 million tonnes in 2011-12 (October to September), “underpinned by strong demand from Asian markets.” “Imports by China, by far the world’s largest buyer, are expected to recover in 2011-12,” it said. “Demand from animal feed and vegetable oil sectors in that country is to expand and, with reports of additional crushing capacity coming online in 2011, demand for imported soybeans is expected to increase.” It predicted an increase in deliveries to China to a record 56 million tonnes, up from 52.1 million the year before. The IGC also expects tight availabilities of alternatives, notably rapeseed, to boost imports, although at 12.8 million tonnes it still expects them to be slightly down on the previous year’s 13.1 million. At the same time, the IGC is expecting a 6% rise in soymeal trade in 2011-12, to 60.1 million tonnes, “on stronger buying interest, notably from Far East Asia and the E.U.” It predicted a rebound in deliveries to Far East Asia to 16.5 million tonnes from the previous year’s 15.4 million, “supported by growth in animal feed sectors in several countries, including Indonesia, Malaysia and Thailand.” Imports of soymeal by the E.U., the largest importer, were predicted to rise by 3% to 23.6 million tonnes, “due to tight supplies of other feed ingredients, including rapeseed/canola meal.” “Despite the recent improvement in U.S. crop prospects, a smaller outturn will restrict the availabilities of soymeal for export,” it said, putting shipments at around 7.8 million tonnes, down from 8.2 million and noting that it would be the second consecutive year of decline. “However, bigger sales by Argentina and Brazil will more than compensate (for the U.S. decline in soymeal exports),” IGC said, putting exports for Argentina at 30 million tonnes, up from 26 million the year before with exports by Brazil up 300,000 tonnes at 14.5 million. The IGC put world rapeseed production at 58.8 million tonnes in 2011-12, marginally lower than the previous year. “A bigger crop in Canada mostly compensates for declines elsewhere, chieﬂy in the E.U.,” it said. “Production trends in member
22

CBOT Soybean Prices
(dollars per bushel)

14 12 10 8 6 4 2 0 10-24-11 10-21-11 10-20-11 10-19-11 10-18-11 10-17-11 10-14-11 10-13-11 10-12-11 10-11-11 10-10-11 10-7-11 10-6-11 10-5-11 10-4-11 10-3-11 9-30-11 9-29-11 9-28-11 9-27-11 9-26-11 9-23-11
Source: Chicago Board of Trade

World Rapeseed Ending Stocks
(in million tonnes)

8 7 6 5 4 3 2 1 0 2011-12* 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10 2010-11

*Forecast Source: U.S. Department of Agriculture

states have been mixed in 2011-12. While crops in France and the U.K. were somewhat better than expected, placed at 5.3 million tonnes (up from 4.8 million last year) and 2.1 million. (1.9 million), respectively, outturns elsewhere, chieﬂy in Germany, were disappointing. In that country, planting delays, together with adverse weather, will result in output falling by about one-third, to 3.9 million tonnes,” it said. Canada is slated to produce an extra 11%, bringing its crop to a record 13.2 million tonnes, because of a larger area. Ukraine, which saw its oilseed production increase sharply from 2004-09, is forecasting a slight decrease in output in 2011-12 to 1.4 million tonnes. Thanks to a larger area and favorable conditions, Australia’s 201112 crop forecast is 2.3 million tonnes, up 7% from last year. Chris Lyddon is World Grain’s European editor. He may be contacted at: chris.lyddon@ntlworld.com.
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