US farmers plan to plant more soya

By Joanna Newman

DOMESTIC soya bean prices have edged higher for a second week with the Chicago March contract settling at 464.5¢/bushel on Tuesday (9 March), up from 462.5¢ a week earlier.

However, there is little to cheer the market. The report on spring planting intentions, due out at the end of this month, is expected to confirm that US farmers plan to switch acreage out of maize and into soya beans due to better Loan Deficiency Payments.

Ironically, this comes at a time of high US soya bean inventories and a 23-year price low.

South America will soon start gathering a record soya bean crop, although there is some talk of harvest delays in northern Brazil due to heavy rain.

Meanwhile soya oil prices have suffered a volatile week. The Chicago March contract, which started the year at 23¢/lb (31p/kg), hit a low of around 17.5¢/lb last Friday.

Exports have been poor this year, while recent soya bean crush data of around 31.0-31.5 million bushels a week suggests that domestic oil supply remains burdensome.

However, the soya oil contract has recovered some ground in recent days to close on Tuesday (9 March), at 18.55¢/lb, its highest level in two weeks.

The rally of the past few days was triggered by news that several countries are purchasing quantities of vegetable oils, including China and Egypt.

Firmer Malaysian palm oil prices have also supported US soya oil values.

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