Soybean prices, which rallied to a record yesterday, may not extend gains because production in South America is set to surge, Commerzbank AG said.
Brazil’s soybean harvest “is set to soar” to 81 million to 82 million metric tons this year, Carsten Fritsch, an analyst at Commerzbank in Frankfurt, wrote in an e-mailed report today. The country harvested 65.5 million tons in the 2011-12 season when drought hurt crops, according to the U.S. Department of Agriculture. Soybeans jumped to a record $17.7125 a bushel yesterday on the Chicago Board of Trade and are up 45 percent in 2012 as the U.S. suffered its worst drought in more than 50 years.
“We believe the supply shortfalls in the U.S. are sufficiently priced in, and envisage no further price rises for soybeans,” Fritsch wrote. “Investors are evidently so preoccupied with the crop prospects in the U.S. that they are entirely ignoring the fact that Brazil is likely for the first time to become the world’s largest soybean producer this year, ahead of even the U.S.”
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