Despite a large U.S. soybean crop, the global ratio of corn to soybeans is still wide — meaning South America needs to produce a strong crop this season.
“The world needs more soybeans relative to corn,” Karl Skold of Bunge North America told the Cereals North America global grain conference in Winnipeg. “We need to get back to the normal relationship between corn and beans.”
Looking at the U.S. soybean crop, Skold said bean yields were consistently good in most areas and there is currently strong demand for the U.S. product.
U.S. soybeans are in good condition in the eastern U.S. Corn Belt; the only places with below-average beans are in the western U.S. Corn Belt, he said, noting soybean sales have been up 43 per cent from last year due to strong Chinese import demand.
“I’m surprised how strong demand is this fall for beans,” he said, but noted the Chinese “are smart buyers who want food security. It’s been a pretty strong start for China.”
However, U.S. soybeans only tell one half of the story. South America is the world’s other major producer and production is expected to be much bigger this year because of the strong soybean prices compared to corn.
“Planting numbers will go up in Brazil,” Skold said. “In Argentina, rains have also stabilized bean ideas.”
It’s expected Paraguay, the U.S., Brazil and Argentina will produce a record amount of soybeans by the time harvest is completed in South America in 2014, Skold said, adding that ending stocks will be “rebuilt.”
— Brandon Logan writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.