Second largest soybean harvest on record worldwide but is it real?
In Germany, UFOP reports that in the running marketing year, farmers are expected to bring in the second largest soybean harvest on record worldwide. This suggests ample supply – but reality is arguably different. Stocks are even projected to decline slightly at the end of 2017/18. Large harvest amounts lead to lower price levels and boost demand. Current estimates see global demand for soybeans rising to 345.3 million tonnes (up 14 million tonnes from 2016/17).
According to Agrarmarkt Informationsgesellschaft (AMI), this figure would only just exceed the anticipated production of 345 million tonnes and, consequently, lead to a reduction in stocks. Demand could lower stocks by more than 1 million tonnes to 93.5 million tonnes. In purely arithmetic terms, the projected 2017/18 soybean ending stocks would cover demand for 99 days. A year ago, ending stocks would have lasted one week longer. These prospects limit the scope for downward movement in prices.
Category: Fuels