Dry weather and shipping delays in
South America are boosting demand for soybeans from the U.S.,
the world’s largest grower and exporter, and producing the
tightest inventories in almost five decades.
Stockpiles will shrink to a nine-year low of 130 million
bushels on Aug. 31, before the next U.S. harvest, according to
the average of 31 analyst estimates in a Bloomberg survey.
Reserves will total 4.2 percent of demand, the lowest since
1965, U.S. Department of Agriculture data show. The USDA will
update its estimates tomorrow.
The drop in supplies will help send Chicago futures up 8.7
percent to an average $16.16 a bushel through August, Morgan
Stanley said in a Feb. 4 report. Prices have climbed 10 percent
from a six-month low on Jan. 11 as drought dimmed prospects for
the crop in Argentina and rain left delivery backlogs at
Brazilian ports. The countries are the largest shippers after
the U.S., where export sales are up 27 percent from a year
earlier, driven by demand from China, the biggest buyer.
“The U.S. does not have the supply to sell more soybeans
overseas,” said
Dan Cekander, the director of grain-market
analysis at Newedge in Chicago, who predicted a rally to $16.50.
“Price rationing will have to occur. It may take six months
before world supplies are more balanced with demand.”
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