Soybean futures’ price decline last month offers a buying opportunity for consumers because demand for U.S. beans is expected to be “strong” in the September-to-February period, Oil World said.
U.S. soybean exports in the first half of the 2012-13 crop year are forecast to jump to 33.5 million metric tons from 24.2 million tons in the year-earlier period, the Hamburg-based oilseed researcher wrote in an e-mailed report.
Demand for U.S. beans is forecast to climb after drought cut the harvest in Brazil and Argentina, the biggest shippers after the U.S. in 2011-12, according to Oil World. Soybean futures fell 11 percent in Chicago in May, the biggest monthly drop since September amid expectations for a bigger U.S. crop.
“U.S. soybeans are likely to face extremely strong demand in the first half of the U.S. crop year, given the severely decimated South American supplies available in that period,” Oil World wrote. “The price setback in May now represents a buying opportunity for consumers.”
Last month’s decline resulted from fund managers scaling back bets on rising soybean prices, combined with weak economic data from the U.S. and India and rain in the U.S. Midwest that improved growing conditions, according to the researcher.
“A new round of fund-buying may trigger a price recovery in early June,” Oil World wrote. “This would be fundamentally justified, especially by the reduction of U.S. soybean stocks to critically low levels by end-August 2012.”
U.S. soybean stocks at the end of August are forecast to slip to 4.6 million tons from 5.85 million tons a year earlier, according to the report. U.S. farmers are expected to harvest 88.7 million tons of beans compared with 83.2 million tons in 2011-12, it said.
A bigger crop “is unlikely to develop a lasting bearish influence,” Oil World wrote.
“Depleted oil-crop stocks in the U.S. and this year’s soybean crop failure in South America leave barely any cushion against crop losses in the U.S. this summer,” the researcher wrote. “This factor will create a bullish price scenario if it becomes too dry in major U.S. soybean growing areas.”
Soybean exports from South America are forecast to slump to 6.53 million tons in the September-February period from 15.5 million tons a year earlier, led by a drop in Brazil’s shipments to 5.3 million tons from 10 million tons, Oil World said.