According to Bloomberg, Hamburg-based Oil World has said that soybean prices may significantly drop through the end of the year, as an abundant supply throughout the top three producing countries has begun to exceed demands.
Soybean inventories in the U.S., Brazil and Argentina may reach a total of 51 million metric tons by September 1. This would be a 5.1 million ton increase compared to the previous year and the fifth-largest supply for the date.
Meanwhile, India saw the October soybean contract drop by 1.23 percent, settling at 3,607 rupees per 100 kg, after falling to its lowest level since January at 3,604 rupees earlier in the day, reports Reuters.
Oil World said in an e-mailed report, "The growth of supplies will finally exceed that of demand, paving the way for a significant recovery of U.S. soybean stocks after three years of declines. This is seen as an important factor for the magnitude of a likely further price decline," according to Bloomberg.
Oil World has reported that the U.S. soybean stockpiles on September 1 may fall to a 10-year low at 3.4 million tons, despite the fact that production in the past 2013-14 season most likely totaled 91.4 million tons, exceeding the USDA's forecast of 89.5 million tons.
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