Farm Ireland

Sunday 23 October 2016

Record yields to drive down soya bean prices

Chris McCullough

Published 06/05/2015 | 02:30

Record yields of soya beans are predicted over the coming weeks in the US and South America
Record yields of soya beans are predicted over the coming weeks in the US and South America

Soya bean prices across Europe have held up better than expected but are predicted to fall over the coming weeks as record yields are harvested in the US and throughout South America.

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Currency fluctuations could also play into farmers' hands, but farmers are being warned that the price decrease will be temporary.

Forward buying the straight now could be a smart move as record soya bean harvests in Brazil and Argentina make a lot more crop available in Europe.

Meanwhile, savvy South American soya bean farmers are said to be holding on to their crops in the expectation that prices will go up after the outcome of presidential elections in Argentina this October.

On-farm soya bean prices in Britain are fluctuating around €410/t, but American trading forecasters say this could drop to just over €200/t locally.

Transport and transaction charges will be added to this Chicago trading price before it gets to Europe.

Stefan Vogel, global head of Rabobank agriculture commodities markets, is forecasting prices to drop below US$9 per bushel (€203.19/t).


"Soya bean futures have held up better than expected so far as the demand side has been strong, but we forecast Chicago Board of Trade prices to decline to or below $9/bushel later this year due to large North American stocks and big South American crops," said the London-based analyst.

This is despite projections from the USDA of lower than expected soya bean area being planted this year, mainly due to the 2015-2016 US soya bean balance sheet forecasting the highest ending stocks in nearly a decade.

However, there are several factors that could change this scenario.

Demand for soya in China and India could increase.

The ongoing political unrest in Ukraine could also affect global trading and counteract any imbalances.

Last year, countries such as Turkey, Egypt, Italy, Greece, Iran and Spain were the main markets for the $703m of Ukrainian soya bean exports.

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