USDA Outlook: Global soybean production forecast to reach 259.2 million tonnes in 2011/2012, as higher crop estimates in India, Canada offset decline in China
December 13, 2011
– The following article is excerpted from the December Oil Crops Outlook published by the Economic Research Service of the USDA.
Larger Soybean Crops Seen for India and Canada but China’s Output Declines
Global soybean production for 2011/12 is forecast up slightly this month to 259.2 million metric tons as higher crop estimates for India and Canada offset a reduction for China. With higher inventories expected for the United States and India, global ending soybean stocks are forecast up nearly 1 million tons this month to 64.5 million.
Indian farmers are estimated to have harvested a record 11 million tons of soybeans this year on an all-time high of 10.3 million hectares. This month’s 400,000-ton increase in the crop was based on better-than-average soybean yields, as moisture was ample throughout the growing season.
But market demand lacks strength and most of the additional Indian soybean supply is expected to boost the level of carryout stocks. Soybean demand by Indian crushers could be steady this year because of a more competitive international trade in soybean meal. The processing season has already started slowly, with Indian exports of soybean meal for October-November 2011 down 27 percent from a year earlier. USDA expects Indian meal exports for the entire season to fall 9 percent to 4.2 million tons. However, the impact of weaker exports of soybean meal could be tempered by strong domestic use, as broiler chicken production in India is seen expanding by 10 percent in 2012.
In Canada, this year’s production of soybeans is estimated at 4.25 million tons, improving by 9 percent from last month and slightly below last year’s record of 4.35 million tons. Soybean yields in Canada were below last year’s record but harvested area increased 4 percent from 2010 to an all-time high 1.5 million hectares. Most of the country’s soybean crop is produced in Ontario, where rainfall was well above average this year. Soybean exports from Canada are still expected to dip 2 percent in 2011/12 to 2.9 million tons, although the improved supply provides more support. Soybean crushing may decline by 3 percent this year (to 1.3 million tons), as processors in Canada have market conditions just as dismal as their U.S. counterparts.
China’s soybean harvest for 2011 is estimated 500,000 tons lower this month to 13.5 million. The country’s soybean area did not reach previous expectations as more corn was sown than earlier thought. Based on official sources, farmers in China are estimated to have harvested 7.65 million hectares—600,000 below the previous estimate. Recent crush margins for soybeans in China have not been that good. Domestic demand for soybean meal has moderated and there isn’t much basis this year for an expansion of exports from China. USDA was prompted by this situation to trim its 2011/12 crush forecast for China by 500,000 tons this month to 60.1 million. Soybean imports for China this year are unlikely to be affected by the reduced domestic supply, leaving the forecast unchanged at 56.5 million tons.