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.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.