By Joanna Levin
THIS years soya bean production in the US is turning out to be less than previously expected. US farmers will produce 38.7 bushels/acre in the 1998/99 season, according to the USDA.
This is a downward revision from their estimate last month of 40.6 bushels/acre and slightly below 1997 yields of 38.8 bushels. As a result, the nation will produce 2.769bn bushels, down from 2.909bn bushels expected in September and only slightly up from last years 2.703bn bushels.
The market was taken aback by the news, having expected an increase in production estimates and bean prices soared. The Chicago November soya bean futures contract closed on Tuesday 13 October at 563.5 cents/bushel, up 8% from 522.75 cents/bushel a week ago.
Thanks to the lower yield, ending stocks for the 1998/99 season will now stand at 395m bushels, down from the previous forecast of 485m bushels, but still nearly double the 1997 harvest of 200m bushels.
In common with other US grains, soya bean prices were also buoyed this week by hopes of food aid to Russia. The USDA is considering food and grain shipments to Russia, which could help alleviate the high domestic stocks.