Bloomberg News

Soybean Prices May Rise After Crop Losses in Northern Hemisphere

December 06, 2011

Dec. 6 (Bloomberg) -- Soybean prices may rise as crop losses in the Northern Hemisphere mean buyers will have to compete for supplies from South America, Oil World said.

Northern Hemisphere soybean production is down about 7 million metric tons this season, and the crop in Brazil may be damaged because of dry weather and above-normal temperatures, Hamburg-based Oil World, a researcher, said in a report today. Global soybean output will be down 2 percent in 2011-12 at 258.9 million tons, the U.S. Department of Agriculture estimates.

“There is an increasing global dependence on a good increase in South American soybean production,” Oil World said. “Considering the ongoing concern about the impacts of below- normal rainfall and above-normal temperatures in southern Brazil, an additional risk premium to prices will probably be required.”

By yesterday, soybean prices dropped 19 percent this year. The U.S. and Brazil are the largest producers and exporters of soybeans, USDA data show.

Imports of soybeans by China, Japan, South Korea and Thailand fell 5.4 percent to 46.6 million tons for January through October compared with the same period last year, Oil World data show. Chinese imports fell 5.4 percent to 41.5 million tons and Japanese arrivals dropped 17 percent to 2.42 million tons, the researcher said.

Imports of soybean meal made from the oilseed and used to feed animals to the four countries dropped 6.1 percent to 5.21 million tons over the same period, according to Oil World.

--Editors: Claudia Carpenter, John Deane

To contact the reporter on this story: Tony C. Dreibus in London at tdreibus@bloomberg.net.

To contact the editor responsible for this story: Claudia Carpenter at Ccarpenter2@bloomberg.net.


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