By Joanna Newman
SOYA bean prices have dropped on almost a daily basis throughout the whole of December.
The Chicago January futures contract settled on 22 December at 545.25¢/bushel, down from 548¢/bushel late last week.
The latest export inspections data was disappointing. In the week ended 17 December, only 17.5 million bushels of soya beans were inspected for export, compared with estimates of 19-24 million bushels.
Weakness in Malaysian palm oil prices also dragged down US soya oil prices, which in turn put pressure on the domestic bean market. Meanwhile, ideal weather conditions for the newly planted crop in the southern hemisphere have raised fears of worsening global oversupply in the spring.
Overproduction has taken a heavy toll on the soya bean market. US domestic prices plummeted from 900¢/bushel in early 1997 to just below 700¢ at the start of this year. During 1998, the soya bean market continued to slide to a low of 525¢/bushel in the summer before recovering slightly to 545¢ yesterday.
With farmers enjoying ideal growing conditions this year, America produced a record 2.9 billion bushels in 1998, well ahead of the previous record set in 1997 of 2.7 billion bushels. Much of this is still unsold.
Thanks to El Niño, Brazil and Argentina are also holding high stocks of beans, 12 million tonnes in October 1998 compared with 7 million at the same time last year.
To add to the glut, this seasons newly planted soya bean crop in the southern hemisphere is off to a good start. Many market analysts predict tough days ahead for soya bean prices.