Soybeans Seen Falling by Oil World’s Mielke on Record Supply

Soybean prices, which outperformed other crops including corn and wheat this year, may fall in the next six months as global production rises to a record, said Thomas Mielke, the executive director of researcher Oil World.

Prices will probably drop to $11.50 a bushel by June, Mielke said today in an interview at Oil World’s outlook conference in Hamburg. That compares with current prices on the Chicago Board of Trade at about $13.32 a bushel. World soybean production may climb 7.3 percent from last season to a record 286.5 million tons, as output expands in South America, he said in a speech.

“Soybeans will be the leader to the downside,” Mielke said, adding that prices will drop if South America has favorable weather and “disease problems can be controlled.”

Soybean futures dropped 5.5 percent this year in Chicago, compared with a 40 percent plunge in corn and a 14 percent decline in wheat. The U.S. Department of Agriculture predicts global production will climb to a record for all three crops. Chinese demand has supported soybean prices so far this year, and markets haven’t yet accounted for the increase in world supplies, Mielke said.

Soybean harvests in South America’s five largest producing countries may climb 9.4 percent from the previous season to 158.5 million tons, Mielke said. That includes a record 88.2 million tons in Brazil and 55 million tons in Argentina, he said. South American farmers are currently planting soybeans and will harvest the next crop in early 2014.

Some areas of Brazil have experienced an infestation of caterpillars and are affected by soybean rust disease, he said. Prices may be supported if those problems intensify, Mielke said in a presentation at the conference. Brazil is the world’s top soybean exporter and the second-biggest producer, after the U.S., according to the USDA.

World production of 10 major oilseeds, including soybeans, rapeseed and sunflower seed, may climb to 494.4 million tons in the 2013-14 season, Mielke said. That’s up from 466.05 million tons a year earlier.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE