Wednesday 22 May 2013

Commodities Buzz: Global Soybean Prices Hit Eight Month Highs On Tight US Supplies

Global Soybean and soymeal futures soared to eight-month highs yesterday on worries about the tightness of US supplies, which spurred ideas that imports will set a record by a bigger distance than has been initially thought. Chicago soybeans for July closed at $14.78 ¼ a bushel, a gain of 0.9% - the contracts highest close since late September last year. The benchmark July soymeal contract stood at $438.70 a short ton, up 0.8%, also marking the highest close for the counter since September.

However, the soya oil prices, despite the latest gains, are hovering just under 50 cents per pound level- maintaining a broad downward trajectory after hitting four month highs near 55 cents levels in late January this year.

The dynamic is also being spurred by ideas of strong demand not just from domestic buyers, but foreign consumers - at a time when port workers in Argentina, the top soymeal exporter, are on strike. US export sales of soymeal, at 8.55m tonnes so far in 2012-13, are within 5% of the level the US Department of Agriculture has forecast for the whole season, with more than three months yet to go.

Indeed, the extent of the drawdown in stocks may yet force the US, historically the largest soybean exporter, to import the oilseed in 2012-13 in greater quantities than the 544,000 tonnes the USDA is forecasting.

Oil World, the influential edible oil analysis group, on Tuesday forecast that imports would hit 870,000 tonnes (32m bushels), nearly double the previous record, set last season, and bought partly from Canada and partly from South America.

US importers have already made a series of purchases of South American soybeans, including three cargoes soybeans sold for shipment to the east coast last week, Oil World said.
Source by Commodity Insights

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