Price boost for soy on BSE fears

Related tags Bovine spongiform encephalopathy Soybean

Soy suppliers could see a boost to sales if fears of a second case
of BSE in the US lead to a full ban on meat and bone meal.

The US department of agriculture said on Thursday that an inconclusive BSE test result had been received on a rapid screening test. Tissue samples are now being examined by USDA's National Veterinary Services in order to reach a firm conclusion.

In late December 2003, for the first time the US identified a BSE infected cow in the state of Washington, leading to a ban from more than 20 countries on imports of US beef.

The American Soybean Association said news of the possible discovery was 'regarded as slightly bullish for soybeans prices.'

"Analysts speculated about rumours USDA would ban meat and bone meal. If an industry-wide ban on the protein supplement were implemented for even hogs and chickens in the future, larger demand would spill over to soymeal to pick up the slack as a source of protein for livestock,"​ writes the ASA​.

News that another US cow is being tested for BSE after an initial test was inconclusive triggered a drive in prices for soybean meal, moving to the highest level since October 11 for the January contract on ideas that there could be further restrictions on meat and bone meal feeding.

Soy prices reached 15 year highs in recent months on the back of a drawdown in global stocks last year but relief is expected this year with the US department of agriculture estimating that the global soy stocks-to-use ratio has moved up by 2 days to 90 days.

The September WASDE (World Agricultural Supply and Demand Estimates) released by the US government projects an increase in global stocks - by 1.3m mt for end of 04/05.

First identified in 1986, 180,000 cases of BSE have been diagnosed in the UK alone and only four out of the 25 EU member states have not yet declared any cases. BSE has affected the entire beef food chain, from producer to consumer.

A recent report from the European Association of Animal Production estimates the cost of BSE to EU15 (prior to accession) member states at more than €90 billion. In addition, the BSE crisis has had a significant impact on public trust in government and governmental scientific advice.

BSE, a transmissible, neurodegenerative, fatal brain disease of cattle, has been linked to the human disease variant Creutzfeldt-Jakob disease (vCJD). According to the World Health Organisation (WHO), from October 1996 to November 2002, 129 cases of vCJD were reported in the UK, six in France and one each in Canada, Ireland, Italy and the US.

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