November 25, 2009

High US soy exports to support prices

US soy exports are likely to remain high, supporting soy prices, but the outlook for the South American crop in early 2010 will be key in price setting, Hamburg-based oilseeds analysts Oil World said on Tuesday (Nov 24).

The recent rise in US soy futures has been fuelled by higher than expected Chinese demand, low South American supplies and high US exports, it said.

"The US soy crop is being marketed at an astounding pace and for Oct-Dec 2009 we estimate combined US soy crushings and exports to rise steeply by 4.0 million tonnes from last year to a record 30.2 million tonnes."

However, Oil World thinks it is not enough to offset the prospective decline of 6.0 million tonnes in Argentine and Brazilian disposals this quarter.

South American soy export supplies have been cut by poor harvests in early 2009 and Oil World warned earlier that poor weather will reduce Argentina's soy crop in early 2010 to below earlier expectations.

World stocks of soyoil and soymeal were expected to fall to multi-year lows at the end of December 2009, further supporting prices, it said.

But weather in major South American soy producers ahead of their harvests in early 2010 coupled with global demand will be key pricing factors to keep in view, it said.