US officials have ditched expectations of a decline in world soybean inventories in 2010-11, citing timely rains which have set Brazil and Paraguay on course for record harvests.

The US Department of Agriculture, in its flagship monthly crop report, hiked by 1.6m tonnes to a four-year high of 60.9m tonnes its forecast for world soybean stocks at the close of the season.

The revision takes the figure above a starting inventory of 58.9m tonnes, reversing expectations of a third decline in stocks in four seasons.

However, taking consumption into account for the so-called stocks-to-use ratio – a much-used indicator of the availability of a crop's supplies and pricing potential – is still set to decline, by one percentage point to 24%.

'Ample moisture'

The upgrade reflected in the main better hopes for the harvest in Brazil, the second-ranked soybean producer, for which the production estimate was raised by 2.0m tonnes to 72m tonnes.

"Ample moisture and favourable late-season weather in the southern states improved yield prospects," the USDA said.

"Favourable weather in southern Brazil has allowed harvest progress to accelerate and reach 80% completion in the state of Parana as of April 6."

Brazil's average soybean yield of just under 3.0 tonnes per hectare, or 44.2 bushels per acre, is higher than the average of 43.5 bushels per acre that US growers achieved in their latest harvest.

Biotech boost?

Expectations for the harvest in neighbouring Paraguay, the fourth-ranked exporter of the oilseed, were also lifted, by 600,000 tonnes to 8.1m tonnes

"Outstanding rainfall, combined with increased investment in fungicides and insecticides, have boosted estimated 2010-11 soybean production," USDA analyst Denise McWilliams said.

She also highlighted that all but 10% of the crop was sown with genetically-modified seed.

The harvest, which about 90% finished, had revealed yields of up to 4.6 tonnes per hectare, equivalent to 68.4 bushels per acre. The average is just under 2.9 tonnes per hectare, or 42.7 bushels per acre.