US soybean supplies before the next harvest will be 7.4 percent smaller than estimates the previous month. It is the lowest level since 2004 and was caused by the rising demand for last year?s drought-reduced crop.
Stockpiles on August 31 will drop to 125 million bushels, which is down from the 135 million estimated in January and 169 million the previous year. The average estimate of 31 analysts polled by Bloomberg News was 130 million. Soybean prices have fallen 17 percent since reaching the record high in September as South American farmers planted more crops for a harvest that was just getting under way.
The decreased supplies have resulted to lower margins for meat producers Smithfield Foods Inc. and Tyson Foods Inc. that buy soy-based animal feed. Oilseed processors such as Archer-Daniels-Midland Co. and Bunge Ltd. could benefit from the animal feed shortage. The central Illinois crush spread is more than 50 percent higher than the average of the past two years.
Soybean futures for March delivery increase 0.1 percent to $14.885 per bushel on the Chicago Board of Trade. Soybean meal for March delivery increased 0.1 percent to $438.1 for 2,000 pounds. The high protein animal feed went up 34 percent last year and gained 4.5 percent to date this year.
The estimate for US crushings of soybeans into animal feed and cooking oil in the marketing year that started September 1 was increased to 1.615 billion bushels from 1.605 billion previously estimated in January. Last year?s total was 1.703 billion. Sales of soybean meal by the end of January were up 43 percent from a year earlier. Soybean oil export tripled during the same time.
The average farm gate price in 2013 will be $14.30 per bushel compared with $14.25 predicted a month ago and $12.50 the year before.
Source: http://www.paydayloansmag.com/declines-in-soybean-inventory-when-demand-rises-in-world/
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