South American soya bean harvest faces further cuts

Soya bean markets continue to rally due to a combination of dry weather and high demand.

Last week, the United States Department of Agriculture (USDA) cut Argentinian soya bean forecasts by 1.5 million tonne (Mt) and Brazilian forecasts by 5.0Mt.

Furthermore, Brazil-based CONAB slashed the country’s soya bean production estimates by 15.0Mt in its monthly update.

It now estimates the crop at 125.5Mt, citing dry weather in the southern states as the reason for the cut.

Sales

Soya bean prices have also been supported by strong US export sales.

The UK's Agriculture and Horticulture Development Board (AHDB) reports that between 4 and 10 February, over 1.8Mt of old- and new-crop soya bean sales have been reported to China and unknown destinations.

Another factor driving edible oil markets is Brent crude oil. The nearby contract rose 3.3% on Friday, closing the week at $94.44/barrel.

Weather

The focus over this next week will continue to be on South American conditions.

Argentina is expecting some rain, but temperatures remain hotter than usual in parts.

Brazil is expecting widespread rains over the next week, which could delay the harvest.