DESPITE heavy oversupply at home and abroad, US farmers intend to plant their largest soya bean crop on record.
According to a recent report released by the USDA soya bean acreage this spring will reach 73.1 million acres, up 1% from 1998 plantings.
Clearly, producers planting intentions are influenced by higher federal subsidies on offer for soya beans compared with maize or wheat, and the report will fuel demands for an overhaul of federal agricultural policy.
Many believe the official 1999 acreage forecast underestimates the true picture and warn that planting could top 75m acres this year.
The market has reacted negatively, with the Chicago May soya bean contract closing on Tuesday, 6 April, at 477.75 cents/bushel, down 5% from 501.5 cents/bushel a week earlier.
After two years of record production, Americas inventory levels are already high.
As at 1 March 1.46 billion bushels were stored on and off farms, a 21% year-on-year increase, according to the USDA.
Meanwhile, South Americas bumper harvest will shortly add to high global stocks.
Brazilian farmers are said to have already gathered half their bean crop due to favourable weather conditions.
The devalued Brazilian currency will enhance the nations export competitiveness against the US.