US soybean and bean oil prices have ridden a rollercoaster on Friday after a downgraded USDA WASDE forecast for US production and stocks eradicated the market’s previously bearish take after Brazil released an upgraded 2015/2016 production forecast.
USDA Friday tipped US soybean production to 3.888bn bu (105.8mn t), down from the 3.935bn bu previously forecast and the 3.911bn bu which the market had forecast before Friday’s release. US end stocks are tipped to fall to 425mn bu in the latest forecast, down from 450mn in September’s report.
Front month soybeans breached 890¢/bu following the report, up from a session low of 872¢/bu. But bean oil remained in the doldrums, pricing 28¢/lb, erasing the week’s earlier gains.
Brazil earlier pegged its 2015/2016 soybean harvest at 101mn t, up 4% compared to the already record 2014/2015 harvest.
Brazilian exports are tipped to hit 53mn t in the new marketing year, up from 50.8mn t in the old crop year. The sliding Real has already proved a major boon to Brazilian sellers looking to gain market share. This in turn has shone a spotlight on the prospects for Argentina’s own currency peg to the US dollar ahead of Argentina’s 25 October presidential election, which has damaged the outlook for sales from south America’s number two soybean producer.
Much of the productino increase is expected to find its way onto Brazilian stockpiles which the government expects to hit 3.87mn t by the end of the next marketing year, up from this year’s starting stocks of 2.52mn t.
MS – 09/10/2015