Bad weather boosts US soya prices

By Joanna Newman

IN common with other US grain markets, soya bean prices have surged since the start of the year after a lacklustre performance over the holiday period.

Prices were depressed before New Year by news of ideal weather conditions for soya bean farmers in Argentina and Brazil.

However, this weeks cold weather in the northern hemisphere spells good news for American soya bean farmers. Recent snow storms are hindering US producers ability to bring their beans to market, placing upward pressure on cash values.

Forecasts of wintry conditions raise expectations that livestock producers will step up animal feed programmes. Freezing weather has raised cattle and pig prices and this

in turn has helped a rally in grain values.

The Chicago January futures contract settled on Wednesday (6 January), at

553.5¢/bushel, up from 549.25¢ at the start of the week.

With the southern hemisphere heading for a bumper harvest this winter, all eyes will be on next weeks quarterly US grains report, which will show the size of carryover stocks for the market to absorb in 1999.

The quarterly Hogs and Pigs report from the USDA, released on 29 December

suggests that farmers intend to reduce farrowings by up to 7% this year, which would cut domestic demand for soya meal.