April 29 (Bloomberg) -- Global production of soybeans will be bigger than previously expected after farmers in Brazil and Paraguay expanded planting for the second of two annual harvests, Oil World said.
World output will be 281.9 million metric tons in the 2013-14 season, up from 279.68 million estimated in March and 6.1 percent more than a year earlier, the Hamburg-based researcher said. Brazil’s crop will total 86.2 million tons, 2 percent more than previously expected, and production in Paraguay will be 9 percent higher at 8.5 million tons, as farmers boost planting of the so-called safrinha crop in the two countries, it said. Brazilian farmers are almost finished collecting the main crop, and the smaller safrinha harvest will be in June or July.
“The global fundamentals have become more bearish,” Oil World said. “This should result in downward pressure on soybean prices in the medium term, unless unfavorable weather delays spring plantings in North America in coming weeks.”
Soybean futures on the Chicago Board of Trade, the global benchmark, are up 16 percent this year as U.S. stockpiles tightened amid increasing Chinese demand earlier this season.
While global imports may be 111.9 million tons, 14 percent higher than last year, most of the increase in purchases from top-buyer China has already taken place, and the country recently “applied a more reserved import policy,” the researcher said. Worldwide exports from April through August may be 3.3 million tons smaller than a year earlier, according to the report.
Global production of seven major oilseeds may be 485.6 million tons in 2013-14, 2 million tons more than estimated in March and 6.3 percent higher than the prior season, Oil World said. This year’s total includes a record 70 million tons of rapeseed and 41.4 million tons of sunflower seed.
Rapeseed production may drop to 68.2 million tons in the 2014-15 season, Oil World said. Canada, the biggest exporter and the top producer of the canola variety of the oilseed, may harvest 16.3 million tons, down from 18 million tons in 2013-14. The European Union’s rapeseed crop was pegged at 21.5 million tons, little changed from 21.2 million tons the prior season. Large stockpiles left over from the 2013-14 season mean global supplies in the next marketing year will remain ample, according to the report.
The world also will be “very well supplied” with sunflower seed in the 2014-15 season amid record stockpiles left over from the previous year, Oil World said. Political tension and lower corn prices may spur farmers in Ukraine to expand sunflower area at the expense of corn, since the oilseed has a lower cost of production.
Ukrainian farmers may plant a record 5.4 million hectares (13.3 million acres) of sunflowers, while lower yields than last year leave 2014-15 production at 10.3 million tons, 4.6 percent less than in 2013-14, Oil World said. Russia’s crop may be 9.5 million tons, down from 10 million a year earlier, and output in the EU may total as much as 8.2 million tons, compared with a record 8.8 million tons in 2013-14.