August 21, 2013
US soy prices may remain high despite rain
US soy prices are likely to stay high inthe coming months even as rain brought relief to drought-stricken areas, Hamburg-based oilseeds analyst, Oil World, said.
Global soy buyers have little choice but continue purchasing US soy following poor crops in Brazil and Argentina this year, Oil World added.
According to the analyst,a cautious management of US soy disposals will still be required in the next five to six months,although recent rainfall prevents the worst for the US crop. "This will limit the downward (price) potential for soy, at least until there is some certainty that South America will indeed produce record crops in early 2013," Oil World reported.
Last week's rainfallmay havebenefit crops suffering from the worst drought in 56 years in the US Midwest. It is now hoped the record soy prices reached in July will encourage South American farmers to plant more soy for their 2013 harvests,thus relieving tight global supplies.
Soy prices are likely to remain volatile in the near to medium term despite support from scarce suppliesdue toprofiteering and weakness provided by demand destruction, Oil World said. "By the end of February 2013, US soy stocks will be reduced to a level at which domestic demand for soy and products will be difficult to satisfy in March-August 2013."