Soybean meal sees a turnaround

Soybean meal prices(CBOT:SMQ4) are expected to become more competitive relative to feed grains in 2014-15, probably boosting trade of oilseed meal partly at the expense of grains, industry analyst Oil World said.

The seasonal outlook indicates a “pronounced” drop in oil meal prices, led by soybean meal, the Hamburg-based researcher wrote in an e-mailed report. The decline may prompt greater consumption of meal as livestock feed, it said.

Soybean meal futures have been the worst performer on the Bloomberg Commodity Index this year, slumping 20 percent amid an outlook for record U.S. soybean production. Crushing the oilseed yields about 78 percent to 79 percent meal and 18 percent to 19 percent oil, according to Oil World.

“Given the magnitude of potential supplies and the resulting pressure on prices, world consumption of eight major oil meals is likely to be boosted to a record,” Oil World wrote. “This will occur again under the lead of soya meal, which is expected to garner market share from other oil meals and also from feed grains if prices are attractive.”

Output of eight major oil meals in the year through September 2015 is predicted to climb to 293.5 million metric tons from 282.8 million tons, with production of soybean meal climbing to 198.6 million tons from 187.6 million tons, the analyst said.

Soybean meal exports may rise to close to 64 million tons in 2014-15 from about 61 million tons in the season through September this year, the report showed.

Rising soybean crush in the U.S. and elsewhere will make soybean meal “an aggressive competitor for feed grains, which is expected to prompt larger consumption in the livestock industries worldwide,” Oil World wrote.

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