(Agrimoney) – The outlook for soybeans remains bearish in the long-term, despite a recent price rally, Rabobank said.
Soybean futures have gained about 14% since the start of the month, prompting Rabobank to upgrade its short term price forecasts for the oilseed.
But the bank warns that “long-term bearish fundamentals still remain in place and will ultimately push prices lower”.
Weather, fund buying
The soybean rally has been fuelled and weather concerns in South America, after flooding in Argentina, one of the world’s top growers.
“The funds are once again interested in commodities, pushing nearby prices higher,” Rabobank said.
Import demand from China, the world’s top buyer, has also been hefty.
Chinese soybean imports in March were up 36% year-on-year, at a record high for the month.
Rally ‘overstated’
But Rabobank believes the rally will be short lived.
“We consider $10 a bushel for new crop soybeans overstated, and maintain our low price forecast for later this year,” Rabobank said.
Rabobank expects US soybean plantings of more than 83m acres this year, compared to an official US Department of Agriculture forecast of 82.2m acres.
“The coming weeks will determine if US farmers potentially exceed the low USDA acreage forecast, while the summer weather will determine yields, and therefore Chicago-traded soybeans can still show substantial price swings in both directions,” the bank warned.
And the bank expected that the next USDA supply and demand figures, out on March 10, will show increasing US end-stocks, despite higher exports.
Bearish outlook
Rabobank boosted its forecast for soybean prices over the three months to August, to $9.15 a bushel, compared to the $9.00 a bushel seen last month.
This is still bearish, given that July soybean futures are currently trading at $10.21 in Chicago.
And forecast for the last three months of 2016 was left unchanged, at $8.80 a bushel, with prices falling further to $8.75over the first three months of 2017.
By comparison, November 2016 soybean futures are currently trading at $10.04 in Chicago, while March 2017 futures are at $10.03 a bushel.
