HAMBURG, Aug 28 (Reuters) - Global soybean prices have still not exhausted their upward potential following new highs because supply shortages mean demand will be squeezed in coming months, Hamburg-based oilseeds analysts Oil World said on Tuesday.
U.S. soybeans hit new contract highs this week after key tour of experts in the Pro Farmer team concluded the drought damage to the U.S. soybean crop is worse than U.S. government forecasts. GRA/
“They (soybeans) have further upward potential in the near to medium term on bullish fundamentals,” Oil World said. “Futures prices are vulnerable to temporary setbacks on profit-taking. But these setbacks are likely to be limited, particularly as long as demand has not been sufficiently rationed.”
U.S. soybean and corn futures hit record highs this summer as scorching temperatures and drought ravaged crops in the U.S., while drought also cut soybean harvests in giant exporters Brazil and Argentina.
“The global supply tightness of soybeans is unprecedented and will result in a decline in world exports by approximately 8-9 million tonnes in Sept. 2012/Feb. 2013 as well as in unusually small world stocks of soybeans in early 2013,” Oil World said.
“However, relief will come from a bumper South American soybean crop which under favourable weather conditions could be boosted to 152 million tonnes in early 2013 from the drought-reduced 116 million tonnes in early 2012.”
But in the meantime, supplies are shrinking.
Soybean stocks in Brazil, usually the second largest exporter after the United States, are forecast by Oil World to fall to 15.59 million tonnes on Sept. 1 from 26.15 million tonnes on Sept. 1, 2011.
Sept. 1 soybean stocks in the second largest exporter Argentina will fall to 18.50 million tonnes from 26.10 million tonnes this time last year, it estimates.
Demand will have to adjust in the time before the new South American harvests arrive in early 2013, Oil World said.
