South Americas rain means misery for US soya

By Joanna Newman

RAINS for South American soya bean farmers are helping drive down US bean prices mercilessly.

Argentina and Brazil are enjoying good moisture and can look forward to excellent yields in the upcoming harvest.

As a result, US soya bean prices continue to fall, with the Chicago March futures contract dropping to 514.0¢/bushel on Tuesday (26 January), down from 528.0¢/bushel just under a week ago.

Following last years record 2.76 billion-bushel harvest in the USA, some analysts are forecasting record high plantings this spring (up 2-3% from 1998) which will exacerbate oversupply at home.

Cattle consumption of soya products is falling. The latest monthly cattle on feed report shows a 5% drop from last year in the number of cattle on grain rations in US feedlots.

While domestic demand is falling, the USA also faces difficulty exporting enough soya beans. The Brazilian currency devaluation earlier this month has cheapened Brazils soya bean exports and hurt American competitiveness.

Recently, rumours of a Chinese currency devaluation have added to US exporters woes, as China may commence shipments of soya beans to world markets.