Advertise
Persistent rainfall across the US Midwest is disrupting the soybean harvest, generating localized shortages of raw material for crushing facilities and forcing processors to scale back operations. Old-crop inventories are dwindling while new-crop beans are arriving at market more slowly than usual.
Processors have responded with sharply higher premiums for immediate deliveries. Cargill's Sioux City facility offered as much as $1 per bushel over November CBOT futures for prompt shipment, while Bunge's Council Bluffs plant raised its premium to as much as 85 cents per bushel.
The price gains, however, are not yet reaching many growers. Saturated fields have kept combines out of the fields, and natural crop dry-down has stalled, pushing harvest timelines back by several weeks in some regions.
The supply squeeze is also rippling through soybean product markets. Several plants have cut back output of soybean meal and soyoil. October CBOT soybean meal futures climbed to a life-of-contract high and traded at a premium to December futures, signaling tight nearby availability.
The tightness comes against the backdrop of record US crush ambitions. The USDA forecasts soybean crush at 2.78 billion bushels for the current season, underpinned by robust demand for soyoil from the biofuel sector.
Source: UkrAgroConsult