US soybean to see increased demand as prices tumble

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Publish time: 16th September, 2014      Source: www.cnchemicals.com
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September 16, 2014

   

   

US soybean to see increased demand as prices tumble

   

   

   

US soybean prices have fallen in recent months due to expectations of a significant crop production, according to Grant Kimberley, the market development director of the Iowa Soybean Association (ISA).

   

   

She believes that the development will create buying opportunities which may strengthen prices. Based on government data, China and other countries have purchased more than 800,000 tonnes of US soybeans last week.

   

   

"We have seen strong global demand recently," Kimberley said. "Given the US Soy Global Trade Exchange conference is taking place next week in Milwaukee, we anticipate demand will continue to gain momentum."

   

   

Additionally, the USDA reported that nationwide harvest is projected at 3.91 billion bushels, up 3% from the August forecast. If realised, the crop will exceed the largest in a decade by more than 500 million bushels.

   

   

Soybean yields nationwide are projected at 46.6 bushels per acre. While a new high, the primary reason for robust productions across the country is a substantial increase in harvested acres at 84.4 million, up 11% from 2013. Soybean ending stocks are projected at 475 million bushels, which would be the highest since 2006 - 2007.

   

   

Currently, the US season-average soybean price is projected at US$9 to US$11 per bushel, down 35 cents on both ends of the range, according to a World Agricultural Supply and Demand Estimates (WASDE) report.

   

   

In the meantime, several soybean purchasing contracts are expected to be signed between Chinese buyers and US exporters for the next marketing year, during the Global Trade Exchange conference, according to industry officials. This development coincides with what ISA officials had gathered from Chinese buyers, predicting that China would import 75 million tonnes, which is one million more than the latest USDA estimate.

   

   

Soybean export projections were raised 25 million bushels to 1.7 billion for the upcoming marketing year due to increased supplies. The domestic soybean crush was raised 15 million bushels to a record 1.77 billion, mostly on increased soybean meal exports.

   

   

However, due to adverse weather, the Iowa Soybean Association (ISA) is not expecting a bumper harvest in the state.

   

   

"In my part of Iowa, the crop looks good but I am not certain it will be one of the best we have raised," said Tom Oswald, the president of ISA. "I expect our crop to be above average but feel the overall wet, cloudy and cool conditions have taken the top end off of our yield potential."

   

   

According to the USDA, Iowa farmers will harvest an estimated 512 million bushels, up 10 million from August estimates. The average yield is estimated at 51 bushels per acre, up one bushel from last month.