30.
05.14
Soybean meal: losing streak continues - prices soaring

Ölsaaten Cockpit, 30.05.2014

Bullish
  • tense front supply situation will be manageable to offer risk
  • Growth and income risks for new crops
  • Sales reluctance in Argentina (how long?)
  • China's demand
Bearish
  • high South American crops on the way
  • high expectations of the U.S. crop in the autumn
  • no longer a pressing demand in the feed area due to lower livestock

IGC increased estimate of soybean crops

The global soya crop Sep/Aug 2013/14 the International Grains Council (IGC) estimates approximately 284 million tons . The estimate to approximately 1 million tonnes was lower in the previous month. Improvements were found in the North and South American production areas.

The consumption side with 282 million tons shows how closely the supply-demand ratio currently fails. For China, the IGC estimates a total consumption of around 80 million tonnes. Of them are rd.  69 Mio.t introduced. The import increase to the previous year is estimated at 9 million tonnes. In contrast, the EU imports approximately 12.5 million tonnes of soybeans; There are also less than 20 million tonnes of soya meal imports.

The South American crops concluded in the spring or early summer of 2014 were put back upwards. Argentina's crop should be now again at 54.5 million tonnes. Also in the meantime graduated Brazilian harvest is now estimated at 86.6 million tonnes. Throughout South America it is of approximately 155 million tonnes compared to 138 million tonnes last year.

4 times as high end stocks compared with earlier years in Argentina are striking. Background is the selling restraint of the Argentine farmers that want to counteract with the help of their soybean stocks of the high inflation rate in Argentina. At rising soy prices, the Bill has risen in the past year. The price development is indeed so far similar to last year. So far no big behavior change on the sale of soy can be observed.

The low rear forward rates in the autumn / winter 2014/15 signal but a completely different development. Whether, when and to what extent an increase in supply from Argentina, remains uncertain for the time being.

The order of soy in the United States is in full swing and is good in the quotas. The crops will be larger than last year. The U.S. crop could supply more than 95 million tonnes. But this includes a favorable yield formation phase in August 2014.

Soybean prices are still on a high price level. Multiple approaches to give are been caught time and again. Supposedly, the extremely tight supply situation in the United States with considerable risks of a safe delivery is with soybean meal until the new harvest in September. Imports from South America although are useful, but do not fundamentally change the problem of the bottleneck situation.

High prices in a tight supply situation will continue a while longer, until the supply security risks are manageable.

Soybean meal: losing streak continues - prices soaring
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ZMP Live Expert Opinion

The recent IGC estimate to the soy market has confirmed the previous lines of development. In the front delivery months are bottlenecks, prevailing in particular in the United States. This situation will continue some weeks and months, until the supply risks are manageable. From the late summer months, at the latest the price declines should prevail increasingly. The price development is controlled by increasing supplies from South America and the growth pattern as well as earnings at the U.S. soybeans. The prospects of a high soy planting from Oct 2014 in the South American countries waving from afar.

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