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Soybean costs have been on the rise, up ~25% ytd and having virtually doubled in worth since 2020. Thursday, the Worldwide Grain Council launched a report citing “dwindling yield potential in South America” and offering the Council’s forecasts for the yr:
- Stockpiles – world soybean stockpiles within the 2021/2022 season are actually seen at 43mt, down 17% from a previous estimate launched in January, and down 35% from pre-pandemic ranges.
- Manufacturing – manufacturing is now estimated at 161mt, down from prior estimates of 167mt, and flat with estimated manufacturing for the 2020/2021 season.
- Planting – the IGC sees soybean-planted acreage rising 2% yr on yr, whereas corn and barley planting is forecast to be flat this season.
The IGC notes that “with excessive enter prices complicating calculations concerning the relative profitability of spring crops, forecasts shall be saved below shut assessment within the months forward.” This on the again of document earnings from fertilizer producers CF Industries (NYSE:CF) and Nutrien (NYSE:NTR).
Complicating elements, an vitality disaster in Europe has pushed fertilizer feedstock costs to all-time highs, and Thursday Belarusian Potash Co. notified clients of a power majeure resulting from export constraints on the port of Klaipeda. Mosaic (NYSE:MOS) is ready to launch earnings February twenty third, and market commentators shall be targeted on any commentary associated to provide / demand balances by means of the spring planting season.
Along with dwindling yield potential, the soybean market is seeing extra demand from accelerating biofuel manufacturing. Earlier Thursday, Renewable Power Group (NASDAQ:REGI) reported plans to spend money on a state-of-the-art pretreatment facility, enabling the corporate to refine waste merchandise, in an try to keep away from pulling feedstock from the meals provide. Nevertheless, the identical day, Vertex Power (NASDAQ:VTNR) introduced a 5-yr provide deal to promote plant-based diesel from its yet-to-be transformed oil refinery bought from Shell (NYSE:SHEL).
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