$20 soybeans in the works, Oil World says
The global soybean prices may resume their rally and rise to as much as $20 per bushel in the next few months on tight supplies from major producing countries following erratic weather conditions, Thomas Mielke, executive director of Hamburg-based journal Oil World, said Sunday.
Soybean futures in the U.S. hit an all-time high of $17.94 3/4 a bushel on Sept. 4. However, since then, they have fallen about 10% due to a seasonal rise in soybean supplies as the pace of the U.S. harvest advanced.
Still, the size of the final U.S. soybean crop remains uncertain, and analysts continue to be worried about prospects for very tight U.S. supplies next year.
"We don't have sufficient reserve stocks for most agricultural commodities. The tightness is particularly severe in soybean world-wide," Mr. Mielke told a edible oil conference.
World soybean supplies during this month and in February are expected to be down by about 32 million tons from a year earlier due to severe drought conditions in south America and the U.S., he added.
High prices of soybean are expected to affect the demand, but may attract the farmers to expand the area under the oilseed next year, he said.
There will be relief in supplies from south America in 2013 as farmers are taking every effort to expand soybean plantings and the supply is expected to improve from early next year, Mr. Mielke said.
He also said the premium of soyoil over palm oil isn't sustainable as cheaper price of palm oil is likely to attract more demand, thereby reducing the abundant stocks in producing countries.
Currently, soyoil is trading at a premium of around $300 per ton over palm oil, compared with a normal premium of $100 to $150 per ton.
Palm oil stocks in major producers in Indonesia and Malaysia are currently estimated at around four million tons, according to industry executives.
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(END) Dow Jones Newswires
September 23, 2012 07:22 ET (11:22 GMT)