Ukraine: where the limit of soybean price increases?




The Ukrainian export market of soybeans on the delivery basis of FOB /CPT faced the growth of prices. The situation is caused by several factors. For example, the recent report of the USDA on distribution of the sowing areas under soybeans in the USA in 2012/13 MY, and information on the volumes of the oilseed stocks on the US significantly strengthened prices in the market segment. Besides, dry weather conditions in South America continues providing long term support to quotations of soybeans in the Chicago Mercantile Exchange.

At the same time, taking into account the bullish price trend, dominating on the Ukrainian export market during the recent week, the activity of trading and purchasing rates stays at the low level. Ukrainian trading companies did not force sales in anticipation of the further strengthening of prices. In turn, companies-importers increased own prices and declared them within the range of 480-490 USD/t CPT and to 505 USD/t FOB (delivery in May-June).

As a reminder, in the previous week, companies-importers usually declared the purchasing prices for soybeans at levels of 475 USD/t CPT and to 495 USD/t FOB.

The situation underscores the enormous dependence of the Ukrainian market of soybeans on the world market. In the reporting case, prices for soybeans only play benefit for Ukrainian traders, as the oilseeds stocks in the country allows exporting significant volumes of the product until the end of the season.

Thus, according to estimations of analysts of APK-Inform Agency, as of March 1 the stocks of soybeans in Ukraine totaled nearly 1.2 mln tonnes against 0.76 mln tonnes on the same date last year, due to restraining of sales by the owners.

Taking into account the fact that, according to our current forecasts, by the end of the season (during March-August) the country may process over 180 thsd tonnes of soybeans, the potential of exports of Ukrainian soybeans in the second half of the season still totals nearly 750 thsd tonnes. As a reminder, during the period of September-February 2011/12 MY, Ukraine already supplied almost 700 thsd tonnes of soybeans on foreign markets, against 617 thsd tonnes in the same period last season.

Taking into account the imbalance of supply and demand on the global oilseeds market, including soybeans, according to analysts of APK-Inform Agency, the high prices will be observed, at least until the end of 2012 sowing season in the major producing countries, where the prospects for future harvest will become more clear.

The estimation of the current situation on the soybean market in Russia and Ukraine, the world market, and forecasts of changes in the short- and medium-term prospect will be presented during presentations of the leading market experts at the international conference "Ukrainian soybean market-2012".

You can fill in the application form to participate in the conference "Ukrainian soybean market-2012" and see the list of participants here.