Strong global demand for US soyabeans will keep soyabean prices firm in the coming months despite the recent fall from early September's record highs, Hamburg-based oilseeds analysts Oil World said on Tuesday. Global importers will have little choice but to compete for scarce US supplies after poor crops in Brazil and Argentina in early 2012, it said.
"Soyabean prices have only limited downward scope as long as US exporters face outstanding demand, primarily from China," Oil World said. "The bullishness may be dampened somewhat by rapid marketing of the US crop as farmer selling is encouraged by huge premiums for nearby delivery."
US soyabeans set a record high of $17.94-3/4 on September 4 as the worst drought in half a century ravaged crops in the US Midwest after drought also damaged crops in Brazil and Argentina this year. But prices fell from their peaks on hopes that rain last month had helped the US soyabean crop, with a key US Department of Agriculture report on Wednesday keenly awaited for the latest indication of the harvest size.
Soyameal prices have also slipped back from record highs seen this summer. "Prices seem to have met upward resistance as demand for soyameal is suffering from the eroded profitability in the livestock sector," Oil World said. There are increasing signs that livestock farmers are cutting production as the surge in soyabean and corn prices this summer raises animal feed costs.
"Like soyabeans, soyameal has only limited downward potential, at least until early 2013, given the unusually low global soyameal production shaping up in coming months," Oil World said. Brazil's September-December 2012 soyabean exports are likely to fall to only 2.5 million tonnes from 7.4 million tonnes in the same period last year, Oil World said. Export restrictions in some form cannot be ruled out in Brazil to conserve domestic supplies, it added. The United States and Brazil are rivals for the position as the world's largest soyabean exporter.
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