November 19, 2009

US soy export demand pressures prices

Solid soy export demand in the marketing year that began in September is putting pressure on prices, US industry officials said on Wednesday (Nov 18).

US soy futures were at three-month highs around US$10.35 per bushel on Wednesday, as commodities across the board have been rallying on the back of a falling dollar, which makes US commodities more competitive on the global market.

US industry officials said the rise in prices is more a result of demand and supply balances than of speculative investment.

US Soybean Export Council Treasurer Danny Murphy said total whole bean exports are forecast to be 1.325 billion bushels for 2009-10, up 6.5 percent from 2008-09 that ended on August 31, with 75 percent of the amount already booked for order, he said.

That would be 36.07 million tonnes, up from 33.85 million tonnes in the year to August 31. Export commitments of whole beans account for about 68.4 percent of that, Murphy said.

Japan's Ministry of Agriculture has forecast soy imports in calendar 2009 will be steady at 3.72 million tonnes from 3.71 million tonnes in 2008. Japan accounted for about 7 percent of US soy exports in the 2008-09 marketing year, compared to 14.8 percent shipped to China.

China bought about 19 million tonnes of soy last marketing year and has already nearly 15 million tonnes committed for this year, Murphy said.

With demand expected to grow rapidly in fast-growing countries such as China, supply could come under constraints, leaving the market open to greater price swings.