by PressInterest in buying soybeans has increased in the U.S.
Interest in soy increased among U.S. processors: reasons for the excitement
Experts note that in the U.S., interest in soybeans has increased in recent weeks. Local processors are trying to buy as much product as possible to replenish stocks. This situation is due to increased demand for supplies of soybeans and other oilseeds, as well as the risk of significant reduction in supply by the end of the current season.
The rush on the domestic U.S. market is quite substantial. For example, one processor has signed a contract to buy soybeans for several months in advance. Other companies created reserves of 60 days, though usually stocks are formed for 30-40 days.
The dynamics of forward purchases of products causes concern in the market. Buyers fear that supply will significantly decrease, which will negatively affect production of soybean-based products. In addition, processors will be forced to import oilseeds until the new crop is harvested.
According to data from USDA, stocks of soybeans have decreased by 10% since the beginning of this year, with last year’s crop increasing by 16%. Analysts predict that by September crop stocks may fall to a record low for the past 7 years. The situation was caused by large volumes of processing and increased exports.
According to the official data, the processing volumes reached the historic maximum last year, and the same dynamics persists for the current period. At the same time, experts say that this trend will end soon.
At the beginning of 2021, processing volume was nearly 185 million bushels, compared to nearly 177 million bushels for the same period last year. The season was quite successful for the oilseed crop, with a total of 4135 million bushels harvested in the country compared to 3552 million in the previous period.
The U.S. line department predicts about 2,200 million bushels of this figure will go to oil production, which is the highest in the past few years. Exports will also increase significantly, to 2,250 million bushels. The growth of these figures in turn will lead to a 70% reduction of soybean stocks compared to the previous season. The index will amount to 120 mln bushels, which is considered to be the minimum for the last 7 years.
In general, the situation on the world market is rather unstable, which is due to increased imports from China and consumption within other countries. The country buys grains and oilseeds in large quantities, which leads to higher prices. At the same time, stocks are rather limited due to bad seasons of some major exporters.