Global supply and Chinese demand causes soybean stocks to increase

November 26, 2017 |

In Germany, UFOP reports that world soybean output in the 2017/18 marketing year will likely be higher than previously expected. The forecast of consumption was raised further, but global stocks could nevertheless grow. Global consumption was estimated at more than 347 million tonnes and would consequently exceed the previous year’s level by more than 4 per cent. According to Agrarmarkt Informations-Gesellschaft (AMI), the rise was based on the steady growth in demand from China. Market experts projected China’s import demand in 2017/18 at 97 million tonnes. Globally, the availability of soybeans is sufficient to meet demand without straining supplies. Ending stocks could even reach a record of 98 million tonnes. Consequently, the scope for upward movements in prices would remain limited in the coming months.

In contrast, USDA’s November outlook on U.S. soybean production was left unchanged from the previous month. Based on the raised Brazilian harvest estimate compared to the previous month, the US authority projected 2017/18 global production at just less than 349 million tonnes. This would be down 0.7 per cent from 2016/17, but up around 1 per cent from the October forecast.

Category: Fuels

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