By Joanna Levin

AFTER months of decline from a high of over 900¢/bushel in May 1997, US soyabean prices managed to bounce back this week their recent lows. The May contract closed on yesterday (April 20) at 643¢/bushel, up from 627¢/bushel the week before.

Processor demand for soyabeans is healthy, and producers are holding out firmly for higher prices. Processors inventories are 1.6 million tonnes below last years levels so they will soon have to start buying in earnest.

But short-term blips in demand cannot disguise the dire oversupply situation for soyabeans. End-of-year US stocks are projected at 12.5m tonnes – the highest since 1985. This has combined with the record soyabean crop in South America to leave many traders cautious, arguing that only a bout of severe weather will cut output and trigger a significant rally in prices.