Palm | Kelapa Sawit

HAMBURG, May 29 (Reuters) - Argentina's 2012 soybean crop could fall as low as 39-40 million tonnes from 49.2 million tonnes in 2011 as drought and flooding continue to force farmers to abandon soy crops, Hamburg-based oilseeds analysts Oil World said on Tuesday.

"The Argentine soybean crop remains in trouble as acreage abandonment is exceeding expectations as a result of severe drought in the northern states as well as the latest flooding in parts of the Buenos Aires province," Oil World said.

"It is thus possible that the soybean crop plunges to only 39-40 million tonnes compared with our current estimate of 40.5 million tonnes and last year's 49.2 million tonnes."

Argentina is the world's third-largest soybean producer after the United States and Brazil. Estimates of South American soybean production continue to shrink as farmers harvest the remainder of the southern hemisphere crop, a factor driving down forecasts for U.S. and global inventories and supporting prices.

Drought and then flooding in Argentine crop areas prompted the Buenos Aires Grains Exchange on May 24 to cut its estimate for the country's 2011/12 soybean crop to 39.9 million tonnes from a previous estimate of 41 million tonnes. [ID:nL1E8GOD38] Brazil is also suffering a poor soybean crop. [ID:nL1E8GM8IP]

"This year's soybean crop failure in South America is additionally weighing on this season's tight soyoil supplies," Oil World said.

Global 2011/12 season soyoil output is likely to rise only 0.3 million tonnes on the year to 41.7 million tonnes following a 2.5 million tonne rise in 2010/11, it forecast.

"We expect world consumption of soyoil to exceed production by 0.5-0.6 million tonnes this season, representing an imbalance which can persist only temporarily."

This will result in a "pronounced reduction" in global soyoil stocks to 3.8 million tonnes at the end of the 2011/12 season against 4.4 million tonnes a year previously, it forecast.