USDA oilseeds report from Fri, 28.06.2013
Even lower soybean stocks for front-end demand - soybean acreage increased.
The USDA's inventory and cultivation report came as a surprise. Soybean stocks from the old harvest were reduced again and the sowing area was increased once more, although the window of opportunity for sowing on time is drawing to a close.
A survey of soybean stocks as at June 1, 2013 revealed that stocks were around 35% lower than the previous year's level, less than previously assumed.
Only 4% less stocks were recorded on the farms themselves. In the downstream marketing stages, the quantities were significantly lower by 46%.
The market prices reacted promptly with rising trends for alternative goods in all forward dates. Soybean meal prices, which were already high, rose again and are approaching the $500 per short ton mark. Soybean oil remained largely unaffected by weak palm oil prices and subdued crude oil prices.
The 2013/14 soybean cultivation report, which was published at the same time, was not entirely unexpected in terms of its direction, but was surprising in terms of its size. In view of the weather-related sowing difficulties, it was generally assumed that unplanted corn areas would be converted to soybeans. The USDA estimates a soybean area even higher than originally planned. The reason for this is said to lie in the high efficiency of tillage technology, which is now capable of handling considerably larger units in a short period of time than was the case in previous years.
This means that the USA is expecting its largest soybean harvest of over 92 million tons. This means that an increased soybean supply can be expected in the fall, which will make the current bottleneck situation a thing of the past. But until then, the shortage must be dealt with sparingly, especially in the meal sector.
The expected high soybean harvest is causing soybean meal prices on the Chicago Mercantile Exchange to fall from $490/sht to $374/sht in Dec 2013, a drop of around 24% compared to July 2013. In the case of soybean oil prices, a stable trend can be observed. This is due to the weak palm oil prices and the expected ample supply development in the further course of the oilseed market.
