June 19, 2009

Thailand's soy futures rose to a nine-month record high last week, up 26.4 percent year-to-date or growth of 13.5 percent month-on-month to 1,267 cts/bushel.

Soy has been in a price swing uptrend since March and is expected to trade at high levels due to the strong new demand from China.

Moreover, the US government has forecast stockpiles to fall to the lowest level since 1977.

The US Department of Agriculture (USDA) has forecast stockpiles in August will fall to 110 million bushels, down from 130 million bushels previously projected in May and a decline 46 percent from last year.

Soymeal futures moved in the same way and jumped more than soy prices by 40 percent year-to-date or growth of 24 percent month-on-month to US$428 per tonne.

The Department of Internal Trade (DIT) has reported domestic soymeal prices up 6.9 percent month-on-month to THB16.81 per kilogramme in May.

Imported soymeal prices were up 12.4 percent month-on-month to THB16.47 per kilogramme in May and that has brought margins on domestic and imported soymeal lower to only THB0.34 per kilogramme.

Soymeal prices will benefit TVO's second quarter earnings in 2009 and is expected to grow 40 percent quarter-on-quarter to THB450 million and probably an earnings peak for the year.

TVO revised up 2009 net profit forecast by 18 percent to THB1,101 million for growth of 47 percent.

US$1 = THB34.138 (June 19)