Soybean prices may “decline only slightly” in the coming season as supplies remain tight until the South American harvest starts in February, Oil World said.
Prices will remain high in the period’s first half before being pressured by record South American output, the Hamburg- based oilseed researcher said today in an e-mailed report. The price of U.S. soybeans, including costs of insurance and freight to Rotterdam, may be $500 a metric ton in the crop year starting July 1, down 5.8 percent from a year earlier.
“The underlying fundamentals are still to be shaped by the partly full growing cycle in the Northern Hemisphere as well as by the planting and growing developments in the Southern Hemisphere,” Oil World said. “Any price forecasts can currently be based only on the assumption of about normal weather conditions.”
Soybeans have climbed 11 percent this year in Chicago trading as dry weather eroded crops in South America, spurring leading global importer China to increase purchases of U.S. supplies. Brazil is the world’s second-biggest exporter of the oilseed after the U.S. and Argentina ranks third.
China may slow soybean purchases in anticipation of ample production in South America in early 2013, which “will allow a significant recovery of global stocks and exert strong price pressure in the course of 2013,” Oil World said.
Ebbing world biodiesel production may also slow demand for oils made from soybeans, rapeseed and other products, the researcher said. Global consumption of 17 oils and fats it tracks may rise 2.9 percent to 188.1 million tons in the marketing year starting Oct. 1, which would mark the smallest increase in 15 years, Oil World said.
“The forecast slowdown of the growth in global biodiesel production in 2012-13 is expected to pressure prices of rapeseed oil and other major oils and fats,” Oil World said. Several countries have already met targets for biodiesel use, limiting production growth, the researcher said.
To contact the reporter on this story: Whitney McFerron in London at firstname.lastname@example.org
To contact the editor responsible for this story: Claudia Carpenter at email@example.com