Sizzling US soyabean export sales appeared poised to cool down this month after a record run, but a long-awaited EU ruling on genetically modified corn will help the market maintain its momentum for a while longer. US soyabean and soyameal sales to the European Union were essentially frozen since several shipments were denied entry this summer because they contained traces of unapproved GMO corn, a violation of the bloc's zero-tolerance policy.
EU clearance of the last of four previously unapproved GMO corn varieties this week was expected to thaw the freeze just as China, the world's top soyabean importer, seasonally shifts its sights away from US soyabeans to supplies from South America, traders and analysts said. "It looks like there will be a pickup in EU imports of soyabeans and there should be a pickup in imports of meal. It's a small window, but it could be significant," said Mario Balletto, analyst with Citigroup.
"They need to get some buying done here for the near term because they can't wait for South America," he added. The United States, the world's top producer and exporter, normally dominates the global soyabean market from October to March before newly harvested South American supplies arrive. Analysts said EU soyabean processors may need to buy 2 million to 3 million tonnes of soyabeans on the world market before the next South American crop is available.
European Union countries bought nearly 450,000 tonnes of US soyabeans in the past three weeks following very slow sales through most of the summer and fall as the GMO approval appeared imminent. However, some analysts said an expected record South American soya crop, some of it harvested earlier than normal, will keep the window for US sales to the EU very narrow. "Once you get past January, that's it.
There will be a transition in February when they maybe take half US and half South American, but then that's it, we're done," said Charlie Sernatinger, analyst with Fortis Clearing Americas. Still, soyabean exporters welcomed the opportunity to add to the exceptional sales they have notched to date.
RECORD EXPORT SALES US soyabean export sales in the September-to-August marketing year to date are nearly 60 percent ahead of last year and are expected to set a fourth consecutive record, largely due to demand from a rapidly growing, commodity-hungry China. China has already bought more than 17 million tonnes of US soyabeans for delivery in the 2009/10 marketing year, just 2.8 million tonnes less that it bought in the entire 2008/09 marketing year.
The US Agriculture Department's latest soyabean export forecast stood at 1.325 billion bushels, or slightly more than 36 million tonnes. But many analysts expect USDA to revise that figure upward in its next world supply/demand report on December 10, mostly due to stronger-than-expected demand from China but also because of the anticipated restart of sales to the EU.
"We have very large sales on the books already so I would think that the EU and probably Mexico are the best chances for adding to sales as we go forward," said Anne Frick, oilseeds analyst with Prudential Bache Commodities. "The key feature on next week's supply/demand report will be an increase on the export estimate," she said, adding that she expects US soyabean exports at 1.418 billion bushels in 2009/10, or about 38.6 million tonnes.
Analysts also expected US soyameal sales to the EU to accelerate following the GMO approval, although high US prices and competition from cheaper supplies from Argentina, the world's top exporter, have limited new sales recently. EU buyers also have 138,000 tonnes of US soyameal purchased for the 2009/10 marketing year but not yet shipped. "Business will pick up at some point. Unfortunately with the price where it is right now, people aren't doing a lot of business," a US soyameal trader said.
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