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Soybean Update

posted Mar 12, 2011, 11:26 PM by NAVYUG Info
Soybean markets over the past couple of days corrected significantly due to weak overseas market as higher production estimates of Brazil amid favorable weather condition for crop are realized as per USDA’s Monthly supply & demand Report: 
The US Department of Agriculture revised 2010-11 global soybean output estimate to 258.4 million tonnes, up by 2.3 million tonnes from its February estimate of 256.10 million tonnes. Brazil's soy crop output at a record 70.0 million tonnes, up by 1.5 mln tn from the February estimate, due to timely rains in the producing regions of the country. It has raised output estimate for China as well. Argentina's soy output has been kept unchanged at 49.5 million tonnes. Estimate of soybean carryover stock in the US was also kept unchanged at 3.82 million tonnes. The USDA raised global 2010-11 oilseeds production estimate by 2.4 million tonnes from the February projection to 444.2 million tonnes. Oilseeds carryover stocks are now seen at 58.33 million tonnes, marginally up from 58.21 mln tn in February. Soymeal output is seen at 178.64 million tonnes, up 1.09 million tonnes from February estimate. Exports are also seen higher at 60.32 million tonnes from 59.46 million tonnes a month ago. The agency pegged soymeal year-ending stocks at 6.42 million tonnes. 

Further higher production estimates of China’s soybean coupled with inflationary concern may decline demand of global oilseeds. China imported 2.32 million metric tons of soybeans in February, a 55 percent decline from a month earlier, according to customs data. That’s the smallest monthly amount since October 2008, the data show.

Back home, higher production estimates of domestic rabi oilseeds also provided support to the bears. India’s kharif (summer) harvest of groundnuts and soybeans and the upcoming rabi (winter) harvest of rapeseed are better than the previous year. Crushers were away from the active buying due to sluggish meal export enquiries and lower crush margin. Soy meal exports in February month were lower than January due to higher price compared to other countries. Meal exports are likely to be down in March as harvesting of the crop is in full swing in Brazil and it is likely to commence very soon in Argentina.