By Joanna Newman
SOYA BEANS have been the star performer of the US grain markets over the past week, soaring 5% to their highest levels since mid-July.
The Chicago November futures contract closed on Wednesday (11 November) at 579.75¢/bushel, up from 550.75¢/bushel just over a week ago.
After months of bad news for bean prices, traders seized on a Government report issued earlier this week that showed slightly lower production estimates, when many analysts had feared an increase.
The USDA shaved its output estimate to 2.76 billion bushels and its yield forecast to 38.6 bushels/acre. This is 0.1 bushel less than the October estimate. While the news is welcome for prices, American farmers are still flooding the market with the largest ever soyabean harvest this year, 2.76 billion bushels. This is up from last years record high of 2.70 billion bushels.
Thanks to a Russian food-aid package, the export estimate was raised by 10 million bushels to 840 million bushels. Overall, the nations ending soya bean stocks have been revised downwards to 365 million bushels from a previous estimate of 395 million bushels.
However, this is still a big increase in the overhang of inventory, up from 200 million bushels last year.
US farmers can afford to wait for better prices to sell their crop because of Loan Deficiency Payment (LDP) subsidies from the government. The domestic and export markets will be struggling to absorb this much soya well into next year.