May 13, 2015

 

US soybean stockpiles to add to worldwide glut
 

 

The global glut that has led to a bear market is expected to expand as the United States Department of Agriculture (USDA) predicts a record stockpile, Bloomberg reports.


World inventories will rise 12% the end of the season that starts on October 1, reaching an all-time high of 96.22 million tonnes, the USDA said. Brazilian supplies will also expand as output climbs.


The outpouring of South American supplies is raising competition among global exporters, and Brazil's shipments are set to top supplies from the United States. That will push domestic inventories to the highest in almost a decade, the USDA data showed.


The stockpile figures were "a wake-up call to the bearish side," Arlan Suderman, senior market analyst at Water Street Solutions, told Bloomberg. "We've got a lot of supply out there. This will be sobering to farmers, and I wouldn't be surprised if we see give-up selling."


Soybean futures for July delivery fell 1.5% to US$9.59 1/4 a bushel on Tuesday on the Chicago Board of Trade, heading for the largest loss since April 9.


Ample supplies have reduced feed costs for integrators like Tyson Foods Inc. and Smithfield Foods Inc., and will also mean countries will pay less to import food than anytime in the past five years, the United Nations predicts.

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