October 27, 2010

Rabobank raises CBOT soy price estimate on Chinese demand

Rabobank raised its forecast Tuesday (Oct 26) for bellwether Chicago soy futures due to strong demand in China.

Rabobank increased its average forecast for CBOT nearby-month futures in the January-March period next year by 23% to US$12.75 a bushel. It raised the forecast for the current quarter to US$11.75/bushel from US$10.50/bushel.

"Global soybean demand remains exceptionally robust and even with prices at current levels, there is no real evidence of demand rationing," Rabobank said in a monthly report.

A combination of healthy crush margins and record export bookings indicates that China's soy imports in the year to Sept. 30, 2011 are likely to exceed the 55 million tonnes currently forecast by the USDA.

China's imports jump to 50 million tonnes last year from 41 million tonnes as compared with the previous year. The USDA is understating global demand, Rabobank said. It said China is the primary driver for this demand, with a 60% share in the global soy trade.

Rabobank also raised its average CBOT corn futures forecast for next quarter to US$5.80/bushel from US$5.25/bushel, and for this quarter to US$5.50/bushel from US$5.25/bushel.