By Joanna Newman
AUGUST is the key month for soya bean development in the USA, and the current bout of scorching dry weather has caused undeniable crop damage.
Temperatures are hovering above 100°F, and short-term forecasts point to more unfavourable conditions ahead.
Prices are likely to remain extremely volatile over the next two or three weeks.
The US Department of Agriculture has severely downgraded its quality assessment of the growing soya bean crop in its latest condition report.
The proportion rated good to excellent is now only 57%, a larger than expected drop from the 65% reported last week.
At least a third of the US soya bean crop is suffering heat stress and lacks moisture.
In reaction to perceptions of lower acreage yields in the forthcoming harvest, the Chicago August soya bean contract has climbed to 472¢/bushel, up from around 425¢ a week ago.
However, it should be noted that the USA still suffers from record high soya-bean inventories, soon to be swollen by a harvest of the largest ever soya bean acreage to be planted in the Union.
Exports have picked up over the past few weeks, as competition from South America appears to be waning.
Brazil, which also had a bumper harvest earlier this year, has finally sold most of its soya beans, paving the way for increased US shipments.