By Joanna Newman
SOYA bean futures prices have collapsed to their lowest level in twenty-three years, with no end in sight.
Long-term US Department of Agriculture (USDA) forecasts released this week suggest that the chronic problems besetting the bean market will worsen this year and next.
After last weeks report that domestic soya bean stocks will more than double to 410 million bushels this year, the USDA has projected a further increase for the 1999-2000 crop year to 565 million bushels.
Because of federal programmes to help soya bean farmers, producers are likely to plant more soya beans this spring and in the year 2000 at the expense of maize, according to analysts and the USDAs own forecasts.
The Loan Deficiency Program (LDP) which supports loss-making grain farmers, could cost taxpayers $1.6 billion (£1bn) this year, up from $500 million (£312m) last year.
Meanwhile in the immediate future a huge South American soya output is due to be harvested in a few weeks.
There is little remaining risk of significant weather damage to the fast-ripening crop.
Brazilian exports are fiercely competitive following the devaluation of the Brazilian currency earlier this year.
The Chicago March futures contract has dropped for nine trading days consecutively, to close on Tuesday (23 February), at 474.5¢/bushel, down from 487.8¢/bushel a week ago and down 20% from early December.