World market can’t get enough soy

The world can't seem to get its fill of soybeans.

Exports from the United States and Brazil, the world's largest growers, are the highest ever for this time of year, and demand is poised to eclipse earlier government forecasts for a record this season.

While big harvests have left inventories at all-time highs, prices have started rebounding from last month's one-year low. That's because cheap supplies are fueling voracious consumption to make soy-based animal feed and cooking oil, especially across Asia.

'Demand is just silly good,” said Dale Durchholz, senior market analyst at Bloomington, Ill.-based AgriVisor. 'The world economy is improving, and as incomes rise, consumers demand more meat, dairy and eggs. Traders have underestimated demand while focusing on the big supply.”

China, the biggest buyer, boosted first-quarter soybean imports by 20 percent from a year earlier, and the pace is twice what it was as recently as 2010, government data show. The country maintains the world's largest pig herd, and it is using more soy-based feed after the government imposed restrictions on imports of a corn-based alternative.

'China does not want to get caught without soybeans,” said Pedro Dejneka, a partner at Chicago-based MD Commodities, which also has offices in Brazil. Dejneka said China's imports may reach 91 million metric tons in the year ending Sept. 30, topping an estimate last month by the U.S. Department of Agriculture for a record 88 million, he said. That's up from 83.2 million a year earlier.

Exports by the United States, the top grower, are running at the strongest pace in two decades, at a time of the year when shipments are usually slower. Soybeans inspected for export rose to 521,218 tons in the week ended April 27, up 62 percent from a year earlier and the most for that period since 1997, government data show.