Soybean futures are on their way to their lowest since 2009, weighed by a “heavily oversupplied” market for the oilseed – but investors are right to bet on recoveries in corn and wheat prices, Macquarie said. For soybean futures, “the two-year outlook remains bearish”, the bank said, citing the boost to expectations for sowings of the oilseed from prices which remain relatively high compared with those of some competing crops. In the US, “with soybeans still being attractively priced against corn, soybean plantings will likely expand by another 5% over the next season,” to a record 87.9m acres, Macquarie said. ‘Heavily oversupplied’ And while the bank was relatively downbeat on prospects for inventories in the US at the end of 2014-15, citing strong export and crush prospects, and in its estimates for Brazilian and Argentine inventories, this was not cause enough for price support. “The global soybean supply and demand balance sheet still remains heavily oversupplied through the current period and into the 2015-16 season,” the bank said, adding that it was “time for underperformance” in prices of the oilseed. Indeed, Macquarie forecast a continued decline in soybean futures to average .00 a bushel in the fourth quarter of this … continue reading
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Source: CTRM Center