July 31, 2014

US soymeal exports could top 11 million tonnes this year

US soymeal exports could exceed a record high of 10.7 million tonnes that the US Department of Agriculture projected for this year, as domestic feed users switch to relatively cheap DDGs and free up more supplies for export, Reuters reported.

DDGs prices have fallen to the lowest levels in four years, as exports dropped while domestic production increased. Meanwhile, soymeal prices remain firm amid tight supplies. As a result, price gap between the two feed ingredients has been widening in several key markets, prompting widespread product switching by feedlots and creating opportunity for more soymeal exports.

Though US soymeal exporters will face competition from South American suppliers, they are expected to benefit from the record-high interest in importing countries. Shipments from the US could potentially top 11 million tonnes for the 2014/15 crop year.

US soymeal exports and sales are running at the fastest pace during 2013/14 with strong demand from major consumers, such as China, combined with diminished competition from one of the leading exporters Argentina.

Furthermore, sales of US soymeal booked for the coming marketing year has already reached an unprecedentedly high level.