A little fodder for the bulls.... I wonder if the fellows from Argentina have anything to share on how things are going down there?
Soybean Prices Are Too Low, Says Oil World
Soybean prices are too low to reflect the risk of setbacks to South American crop supplies and an outlook for “unusually” small inventories at the start of 2013, says Oil World, according to a story from Bloomberg.
The influential analysis group sounded a bullish note on prices of soybeans highlighting the low levels of world inventories ahead of the start of the South American harvest next year.
At 49.3 million tonnes at the start of calendar 2013, stocks will be down some 30% year on year, leaving "hardly any cushion for crop damage".
"In our opinion the prices of soybeans and other oilseeds are currently undervalued considering the production risks in South America and the unusually small world stocks available at the beginning of 2013," Oil World said.
Concern Over Dryness In Southern Brazil
The Brazilian state of Parana has suffered a water deficit of 210mm-297mm over the last 90 days, according to Martell Crop Projections.
"The southern one-third of Brazil continues to turn drier. The trade is now concerned with the rapidly declining soil levels," broker US Commodities said, notes agrimoney.com
Dr. Michael Cordonnier has flagged "speculation that another drought may be on the verge of developing" in the southern Brazilian region.
"The soils in many areas of Parana now contain just 25% of their potential water holding capacity, when normally this time of the year, the soils should contain 75% of their potential water holding capacity", Dr. Cordonnier said.
Also there is the possibility of the return early in 2013 of La Nina.
"If that occurred, it could result in deteriorating crop prospects for southern Brazil because neutral conditions or a La Nina generally increases the chances of dryer-than-normal weather in southern Brazil," Dr. Cordonnier said.