The main factors that should be taken into account when considering the price of soybeans are global production, exports, imports, consumption, seasonality, weather conditions and stocks.
Production. On April 8th the USDA released another report, according to which the global consumption of soybeans in the 2010/11 marketing year is expected to reach 260,972K tons, which is 2,570K tons more than was predicted in March and almost 1M tons more than it was in 2009/10.
A production increase is anticipated in Brazil and Paraguay. The forecasts for the US, Argentina, China, India and Canada remain the same: 90,6M, 49,5M, 15,2M, 9,6M and 4,35M tons correspondingly.
The following chart shows the change dynamics of soybean production for the period of 2006-2011:
The following chart reveals the production dynamics for numerous producing countries:
Export. The world’s major exporter is still the USA. The export forecast is 43M tons (a 270K decline as compared with the march forecast and an increase as compared to 2009/10). The forecast for Brazil’s export has recently been increased by 200K tons, reaching 32,75M tons. Argentina is still expected to export 11M tons of soybeans. The expected global export of soybeans is estimated at 98.5M tons, which is 250K tons more than predicted in March and almost 6M tons more than in the 2009/10 season.
The market export dynamics can be seen on the chart:
Here is the chart showing the export dynamics for the world’s major exporters:
Import. As compared with the previous month the import forecast has been changed only for Mexico. The previous value is 3,6M tons while the current one is 100K tons more. The Chinese import still remains the highest one at the level of 57M tons. As compared to the previous marketing year the soybeans import to China has been increased by 7M tons. The EU, which is the world’s 2nd biggest importer of soybeans, is planning to import 14M tons this year. Despite the disaster in Japan, its import forecast hasn’t been changed. It makes up 3.45M tons. The forecast for the global import of soybeans has been declined by 400K down to 95.4M tons. However this figure is still 8M bigger than that of the previous year.
The global import dynamics:
The global import change for various countries:
Stocks. The situation with stocks has become more stable. The stock forecasts for Argentina, China and Brazil have recently been increased. The US and EU stocks are said to be reduced by 10K tons and 50K correspondingly. The global stocks make up 60.9M tons, exceeding the March forecast by 2.5M tons.
The global stock dynamics can be seen on the following chart:
The stock dynamics for different countries:
Domestic consumption. As compared with the previous marketing year, the consumption in China has grown by 8.5M tons while the consumption forecast has declined by 400K tons relative to the previous month. The forecast for the USA has also been reduced by 136K tons relative to March’s forecast. The consumption forecast for Argentina has seen a 760K decline while the domestic consumption of soybeans in Brazil is expected to grow by 1.8M tons. In the EU the consumption is estimated at 13.6M tons, which is almost 1.2M tons more than in 2009/10. The global consumption is expected to increase by 16M tons.
The consumption change for different countries:
Analysts from the Department of Commodity Trading, Masterofrex-V Academy, have analyzed the data and assume that there are no objective reasons for the market of soybeans to rally. The growing production of soybeans in Brazil, increasing global stocks, declining consumption and seasonality don’t prompt any price growth. The situation may cardinally change only if there are bad weather conditions affecting the harvest. The price will probably start gradually declining or moving in the price range of $1450-1250/b.
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