By Joanna Newman
THE US soya bean market found support this week from a rebound in the Brazilian currency.
This will make Brazilian exports less competitive compared with the US in the global arena.
US soya bean market inched upwards this week, with the Chicago May contract settling on Tuesday (13 April) at 485.3¢/bushel, up slightly from 477.8¢ a week ago.
There have also been recent downward revisions in harvest estimates for Brazil and Argentina.
However, most analysts and producers remain extremely bearish on the outlook for soya beans due to oversupply.
The US Department of Agriculture has cut its prediction for this seasons ending stocks to 430 million bushels from a previous forecast of 470 million. Nevertheless, this will still be the highest inventory in 13 years and more than double the 1997/98 surplus of 200 million bushels.
Federal subsidy distortions will encourage US farmers to plant their largest ever crop this spring, at 73.1 million acres.
Besides overproduction in the northern and southern hemispheres, the market suffers from a structural imbalance due to excess crushing capacity in the USA and elsewhere.
Poor crushing margins for soya meal and oil production are adding to the industrys woes.
Exporters are hoping that this weeks Sino-US trade negotiations will lead to increased export opportunities for US soya beans to China.
Meanwhile, the Russian food-aid programme is still on track despite the Balkan crisis. Russia is expected to tender for US soya beans and soya meal shortly.