By Joanna Levin
BEAN prices remain unchanged at the end of the week following some volatile trading. The Chicago November bean contract settled on 23 September at 525.25¢/bushel, compared with 526¢ a week ago.
On the positive side, the strength in soya oil is supporting bean prices in the short term. The Chicago October soya oil contract closed on Wednesday 23 September at 24.97¢/lb, down 0.53¢/lb from the day before but up from 23.5¢/lb in early August.
Domestic soya bean stocks are climbing as the new crop starts to be harvested. This crop will be the highest on record at 2.91 billion bushels, according to Government estimates, up 7% from the record harvest of 1997. On the export side, China is unlikely to enter the market in the near future because it has released its own inventory reserves into the Chinese market.
The question is whether US producers will rush to sell their crop, thereby clearing the way for a market recovery. This seems unlikely as there is little incentive for farmers to sell at these low prices.
As in the case of maize and wheat, the Government is paying subsidies and so-called transition payments to soya bean farmers under federal farm legislation. With these payments rolling in there is less urgency for the farmers to sell their crop at any price.