Soybeans are "the new corn" in terms of the level of shortage of their supplies, creating the potential for persistently high prices, a leading commentator said after the US cut its estimate for supplies of the oilseed.
The US Department of Agriculture, in its much-watched Wasde report on crop supply and demand, lowered its forecast for domestic soybean supplies to 175m bushels at the close of this season, and to 140m bushels at the end of 2012-13.
Joseph Glauber, USDA chief economist, said the cuts "reflect increased export and crush projections for 2011-12", with shipment prospects being boosted by disappointing South American harvests.
While the downgrade to 2012-13 carryout stocks was, at 5m bushels, only small, it trimmed the oilseed's stocks-to-use ratio to 4.3% - the lowest since the 4.2% reached 47 years ago.
'The corn of two or three years ago'
Indeed, the tightness in soybean inventories echoes that of corn ahead of the rally which lifted Chicago futures in the grain last June to a record high just short of $8 a bushel, said Sal Gilbertie, president of Teucrium Trading, an issuer of commodity-based exchange traded funds.
"The soybean balance sheet is getting tight – that's the story in this report," Mr Gilberie told Agrimoney.com.
"Soybeans are the corn of two or three years ago."
The revisions underlined that "relative to corn, soybean prices are going remain high throughout the new crop year. We are looking at more than a year of high prices."
Yield question
The implications for soybean prices could be "more extreme" if the US crop does not live up to expectations of a 3.21bn-bushel harvest, on a yield of 43.9 bushels per acre, Mr Gilbertie said...
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Source: Argentine Beef Packers S.A.
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