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24-4-2008 | Other news

In the soybean market, the Rabobank's Soft Commodities Monthly Report says the Argentinean farmers’ strike, competition from corn for available acreage and robust demand conditions have provided soybeans with a more optimistic price scenario for 2008.

• CBOT soybean prices fell 23% through March before rebounding 15% by mid April to USD 13.80 per bushel. 
• USDA Prospective Plantings report March 31st indicated a 17% jump in US soybean plantings in 2008. 
• 2007/08 US inventory levels to drop 80%, year-on-year, increasing reliance on 2008/09 production to meet robust demand.   

Soybean prices
The farmers strike in Argentina together with surging corn prices and a weak US dollar have resulted in soybeans regaining upward momentum. As the soybean harvest progresses in Brazil and Argentina without any major weather disruption, focus will next turn to US weather conditions for corn, soybean and spring wheat plantings. In addition, new record crude oil prices in mid-April will also help support the soybean futures complex with biodiesel processor margins improving.

World soybean fundamentals
There does not appear to be any substantial evidence that soybean demand is slowing in the first half of 2008, despite the record price levels that have been set in recent months. Soyoil demand remains strong, supported by record crude oil prices, which show no indication of a major correction despite a significant slowdown in the US economy.

US
Surging petroleum prices dragged biodiesel prices higher providing strength to soybean oil demand and may further draw down soybean stock levels in the 2007/08 season. Final US soybean production will also be heavily reliant on weather conditions over the coming months for both plantings and yield in the 2008/09 season. 

Brazil
Given the current uncertainty in Argentina’s export market, the progression of the Brazilian soybean crop, the world’s second largest producer of the crop, has taken on increased importance this season. Despite on-going logistical constraints, both up country and at port continue to create inefficiencies in the Brazilian export market, increased soybean exports are expected in the 2007/08 season.

Argentina
Argentina is the third largest producer of soybeans, behind the US and Brazil. The farmer strike in March following the government’s announcement of a 44% export tax hike has created significant issues for both the Argentinean and world soybean markets. Currently, the strike has been suspended, but no resolution has been reached. As a result, consumers and traders have switched demand to alternate exporters such as the US and Brazil.

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