US soya prices reverse decline

By Joanna Newman

AFTER months of relentless decline that brought the market to its lowest level since the 1970s, soya bean prices have finally turned around in response to hot, dry weather conditions across the US corn belt.

Extremely high temperatures and unfavourable short-term weather conditions for bean farmers have caused an abrupt change of sentiment in the market.

The Chicago soya bean futures contract for the month of August has jumped to its highest level since mid-June in a typical weather-rally.

The contract closed on Friday, 23 July at 472.0¢/bushel, up 11% from 423.8¢ just under a week ago.

Traders have switched their attention from the record-high inventories of soya beans and are now focusing on the possibility of a reduction in US acreage yields this autumn.

These concerns were fuelled by last weeks crop condition report from the US Department of Agriculture, which saw a reduction in the estimate of crop rated good to excellent from 71% to 67%.

However, even moderate crop damage will make little inroads into this years expected largest-ever harvest.

The severe glut of soya beans in the USA and worldwide may well discourage any attempts of a sustained price rally.

On a brighter note, cheap US beans are finally attracting foreign buyers away from the South American competition.

In the week to 15 July, the USA exported a healthy 11.6 million bushels of soya beans, all to Asian Pacific rim countries.

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