USDA Oilseed: World Markets and Trade April 2012

USDA Oilseed: World Markets and Trade

Reports » USDA Oilseed: World Markets and Trade » USDA Oilseed: World Markets and Trade April 2012

12 April 2012

U.S. soybean prices continue to rise as concerns mount that supply will be insufficient to meet demand over the next 9 months.

Prices have climbed $40/ton (8%) since early March and $90/ton (21%) since mid-January. The driving force is the continuing fall in South American production. With a 5 million ton loss this month, total South American production is now down 18 million tons (13%) from initial estimates in May.

Compounding the issue is the U.S. Prospective Plantings report released on March 30th. While plantings came in close to the initial acreage forecast released by USDA in late February, it failed to show higher soybean plantings in response to the smaller South American crops. Market reaction was swift, with prices surging $18/MT in one day, and rising even higher through the first week of April.

Exacerbating the tightening of the South America supply situation, Brazilian exports reached a record 4.2 million tons in March, shattering the previous mark by nearly 40 percent. Expectations remain high for brisk early South American sales, while concerns heighten over the size of the upcoming U.S. crop.

OVERVIEW

Global soybean trade is lowered as many importing countries respond to higher prices that are driven by shrinking exportable supplies in South America. World import demand for soybean meal and oil is marginally up. U.S. season average farm price is raised to a new record.

SOYBEAN PRICES

U.S. export bids, FOB Gulf, in March averaged $522 per ton, up $30 from last month. The rise is attributed to a pickup in the sales pace amid concerns over South American crops.

As of the week-ending April 5, U.S. soybean commitments (outstanding sales plus accumulated exports) to China totaled 20.9 million tons, compared to 25.2 million a year ago. Total commitments to the world are 31.7 million tons compared to 40.4 million for the same period last year.