Only poor weather can spare soybeans from a "supply-led bear market" in 2010, which will see prices drop to $8.50 a bushel by next summer, Rabobank said.

However, separate comments from Commerzbank forecast that US soybean prices may be underpinned by dollar weakness.

Rabobank said that the record harvests on the cards for South America's biggest producers, Argentina and Brazil, will drive a big rebound in world inventories of the oilseed, despite a rise of 5% in demand too.

The stocks-to-use ratio, a key measure of supply constraints, will rebound from a seven-year low of 19% two months ago to 24% by next September.

The looser supplies will unwind the tightness which drove Chicago prices to an average of nearly $13 a bushel in the 2007-08 marketing year, and kept them above $10 a bushel in 2008-09.

"Our expectations for soybean market fundamentals for next season suggest a supply‐led bear market for soybean prices is likely throughout 2010," a report from Rabobank's City office said.

El Nino factor

Weather was "seemingly the only thing" which could help prices in calendar 2010 by preventing Brazil's production hitting Rabobank's forecast of close to 63m tonnes, and Argentina's of getting to 51m tonnes.

However, given the occurrence of an El Nino weather pattern, which typically brings wet weather to South America, Argentina looked unlikely to suffer a repeat of last year's drought, which sent production down by more than 20%.

"A catastrophe in the Argentinean soybean crop similar to last season's appears unlikely," the bank said.

Brazil has so far enjoyed "favourable" conditions, with early rains helping plantings.

Between them, the two countries looked set to produce an extra 24m tonnes of soybeans for export in 2009-10, causing "significant pressure on demand for US soybeans and soybean products from January forwards… and significant bearish pressure on world prices".

Exchange rate question

However, Commerzbank said that exchange rate changes may turn the market in America's favour, after the Brazilian Oilseed Processors Association, Abiove, warned of the impact of a strong real on Brazil's export hopes.

Commerzbank - quoting an Abiove forecast that Brazilian soybean exports would fall 7% to 25.8m tonnes in the year starting in February - said the US "may benefit most from this trend".

"A soft US dollar already appears to support demand for US soybeans," the German bank said, noting American soybean exports running this month at twice the level of last year.