By Joanna Levin
THE soyabean market in the Americas increasingly bearish. If, as expected, US farmers plant a record high of 29.1 million hectares of soyabeans this year, they will produce about 76.5m tonnes, compared with an optimistic demand projection for only 71m tonnes.
The May futures contract lost 9¢/bushel during the week ended April 3 to 637.25¢/bushel (383p/bushel) – its lowest point since last October. The contract – which rallied to a high of 750¢/bushel last November – has been declining ever since. July beans fell 10.25¢/bushel on the week to close at 838.25¢/bushel.
Traders estimate carry-over stocks will now exceed 12.5m tonnes – or perhaps more if overseas oilseed supplies are lower priced. Soyabean stocks have only once before exceeded 13.6m tonnes and that was in 1985.
Poor weather could cut 1998 crop yields. But most traders remain bearish about the oversupply situation. In the Southern hemisphere, the heavy rains in Brazil have contributed to a bumper crop, but there has been no significant delay in the ongoing harvest.
Brazils soyabean crop is estimated at 30.6m tonnes, up a strong 14% from 1997. Thanks to El Niño, production in Brazil, Argentina and Paraguay is estimated at a record 48.9m tonnes, up 20% on last year. But the wet weather is making it difficult to load soyameal on to ships without risking a wet cargo.
Brazils exports have been delayed and shipping could drag on till October or November, overlapping the US harvest season. Last year, Brazil finished exporting its crop by July.