December 10, 2003

US Soybean Prices Seen To Rise On Strong Demand in Coming Months

U.S. soybean prices are likely to increase in the coming months due largely to strong demand and tight global supplies, Hamburg-based newsletter Oil World said yesterday.

"We expect higher prices and see the March futures rallying towards $9 (a bushel) and possibly higher within the next three months," it said.

Reduced northern hemisphere soybean crops contrasted with an unprecedented pace of soybean exports and crushings.

"World demand is still expanding sizeably as the price rally in September/November could not yet accomplish sufficient rationing," it said. "The result is a rapid reduction of available world soybean supplies."

Soybean stocks in the U.S., Argentina and Brazil will fall to 28.4 million tons at the end of February 2004 against 36.1 million tons a year earlier, it estimates.

Of these, U.S. soybean stocks are likely to fall to only 26.4 million tons at the end of February 2004 against 33.9 million tons a year earlier.

"The necessary steep reduction in U.S. soybean crushings and exports in March/August 2004 will sharply raise the world market's dependence on South American soybeans, oil and meal," it said.