Soybean prices fell to a five-month low on Thursday after the US government said that world supplies will be bigger than estimated in March.
The outlook for global inventories was increased for a second month, data from the US Department of Agriculture showed. Record crops in Argentina and Brazil, the top growers after the US, are adding to supply as Midwest farmers are set to plant the most acres with the oilseed ever this spring.
Bigger grain and oilseed supplies have pushed world food costs to the lowest level since June 2010 as declines in commodity prices help to keep a lid on inflation. Soybean futures in Chicago tumbled 35 percent in the past 12 months, helping to trim expenses for meat producers who use the crop in livestock feed, such as Tyson Foods.
“Supplies are still adequate-to-burdensome, especially compared with the last several years,” Don Roose, the president of US Commodities in West Des Moines, Iowa, said in a telephone interview. “The US is not competitive with cheaper South America supplies in the world market, and that is keeping the market on the defensive.”
The gains for supplies were limited as the agency said that U.S. inventories will be smaller than forecast last month. Still, the USDA increased its outlook for production in Argentina.
Global reserves before this year’s harvest in the Northern Hemisphere will total 89.55 million metric tons, the USDA. That compares with 89.53 million forecast in March. Analysts surveyed by Bloomberg expected 89.57 million, on average.
Bloomberg News, edited by ESM