US soybeans in high demand as Brazil’s crop falls short

US soybeans in high demand as Brazil’s crop falls short

International News, Uncategorized















Bloomberg

Soybean buyers stung by a smaller and slower harvest than expected in Brazil are turning to the US for supply, driving up prices and threatening to worsen food inflation.

What was expected to be a record crop in Brazil is now looking far smaller, with lower yields and harvest delays due to adverse weather catching traders and end-users shorthanded. The uncertainty has driven buyers into the US market. More than 110 ships have been chartered on a preliminary basis to load crops at ports in the Pacific Northwest, according to Bill Tierney, chief economist for AgResource Co. in Chicago.

The rush by physical traders and financial players has driven up futures in Chicago by 30% since early November to an eight-month high, with the premium for July contracts over November surging eight-fold. Demand for immediate delivery has pushed cash prices at elevators in the US Midwest to unusually high premiums to futures. Sales for export jumped to almost 2 million tons last week, exceeding the highest analyst estimate.

The impact of higher soybean costs is set to ripple through the food supply chain at a time