June 27, 2012

Oil World expects soymeal prices to remain firm

Soymeal prices are expected to stay firm over the next few months, and Indian soymeal exports could be boosted as world soymeal supplies are reduced due to the poor South American soy crops, Hamburg-based oilseeds analysts Oil World said on Tuesday (June 26).

"The prospects are that world soy crushings will at best stagnate in the first half of the new season and that world export supplies of soymeal are likely to shrink," Oil World said. "This should keep prices well supported, particularly in Oct./Dec. 2012."

"This is creating a great opportunity for Indian producers and exporters of soy and meal, once new crop supplies become available in October."

US soymeal futures have risen since late May as poor soy crops in Argentina and Brazil were confirmed and concern grew about hot and dry weather hitting the US crop.

"World exports of soymeal are likely to shrink in the first few months of the new season," it said. "For Oct./Dec. 2012 we expect combined soymeal exports of Argentina and Brazil to decline by at least 2.0 million tonnes from last year."

This will shift export demand to other origins, including the US and India, it said.

"In the US, soy crushings are likely to be high and rise sharply from last year in Sept./Dec. 2012," it said. "However, a prospective increase in US soymeal exports can only partly compensate for the South American export losses."

Indian supplies could help fill the gap but the sales window would only be open for a short time and Indian farmers would need to be active sellers of their new soy crop, it said.