November 4, 2014
US soy crush margins to remain strong until early 2015
USsoy crushing margins have remained strong and will probably remain so until the start of next year because of tight soy supplies.
Soren Schroder, CEO of Bunge Ltd, said recently US margins would be "well above historical averages and probably the best we've seen in many years" for another six months.
"Demand for US crushing capacity is real, and it will stay with us for quite a while," he added.
Supplies of soy available for crushing in the US tightened in October as rains delayed the start of the autumn harvest and inventories from the previous harvest dwindled. Farmers also delayed crop sales because of weak prices.
"The country was out of beans really," he said.
A late start to soyplanting in Brazil was also expected to reduce competition for export business, helping to keep US crushing margins strong, analysts said.
However, according to JP Morgan analyst Ann Duignan, margins are likely to pull back from their current levels because the harvest is increasing supplies.
"I don't think any of us really expect those to be sustained at current levels given it's probably driven by the lack of supply," she said.