The Hindu Business Line : US soya output pruned further

A FURTHER reduction in the 2004-05 US soyabean crop has been forecast by the US Department of Agriculture (USDA), placing anticipated production at 77.2 million tonnes, down from last month's forecast of 78.3 mt.

The first forecast made in May was 80 mt. However, the potentially bullish forecast did not have any significant impact on the market as the crop production number was largely offset by favourable weather forecast.

For the year 2004-05, USDA has forecast world oilseeds production to reach a new high of 380.5 mt, an increase of 45 mt from the previous year.

Notwithstanding a slightly lower output forecast for the US, global soyabean output in 2004-05 is expected to show one of the biggest increases in recent times and reach a record 223 mt, up from 188.5 mt of 2003-04.

Major contribution to the increase is likely from Brazil (66 mt -increase of 13 mt from previous year) and Argentina (39 mt - increase of 5 mt). However, planting of the South American soyabean crop is yet to commence and harvest is several months away.

Interestingly, USDA has raised its forecast of soyabean production in India to 7 mt based on the sharply higher acreage (estimated at 7.7 million hectares) reflecting producers' response to higher prices.

However, not many observers of the domestic market and crop conditions share USDA's optimism.

Although there has been a sharp expansion of area coverage for soyabean following extra-ordinary prices growers received last season, long dry spell in July is believed to have inflicted some irreparable damage.

August rains, no doubt, resurrected the crop from a major setback; but yields are likely to be lower than even the normally low 900 kg per hectare.