Low Argentine soyabean exports this season are likely to lead to strong demand for US soyabean exports and create tight supply, oilseeds analysts Oil World said on Tuesday. Soyabean importers globally are hoping that a large US soyabean crop this year will help relieve the world market after three years of tight supplies, but an expected fall in exports from Argentina poses a risk to that outlook and could keep up pressure on prices.
Soyabean prices hit record highs last year following a US drought. US soyabean and soyameal futures rose sharply on Monday as processors scrambled to obtain scarce supplies, amid fears stocks may run short ahead of the autumn US soyabean harvest due to strong demand. Inventories of old-crop soyabeans, which are crushed into meal used to feed livestock, are expected to drop to a nine-year low by August 31.
Argentine farmers are unwilling to sell soyabean as they are often unhappy about their country's high soyabean export taxes and the official exchange rate, which works against farmers, Oil World said. "Subdued farmer selling and low shipments to the ports are currently still keeping Argentine soyabean exports at a relatively low level."
Oil World currently estimates Argentina will export 4.5 million tonnes of soyabeans in July/September 2013, up from 2.9 million tonnes in the same period of 2012. "There is a high risk that actual exports in the July/September quarter will be lower than we are currently assuming," it said. In fact it cannot be ruled out that actual shipments from Argentina (will) turn out 0.5-1.0 million tonnes below our current estimate."
"This will result in larger-than-expected Argentine soyabean stocks and if conditions do not change, in correspondingly larger US soyabean exports already in September and October 2013 onward." The possible delay in US soyabean harvesting this year plus infrastructure restrictions in the United States such as shipment limitations on the Mississippi river "could create a difficult situation, particularly if China becomes a strong buyer of US soyabeans for early shipment," it said. Brazil is set to be the world's largest soyabean exporter in the 2013/14 season, followed by the United States and Argentina. But strong demand means 96 percent of Brazil's soyabean export supplies are expected to be shipped out by the end of September 2013, Oil World said.
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