The soybean market stands on the verge of an upheaval which Oil World said will be marked by a "price setback", while US farm officials defined it in terms of a collapse in processing margins.

Oil World, the analysis group, said that values prices may have another month of support from Brazil's logistical hiccups before suffering a "setback" encouraged, ironically, by the impact of high values in incentivising US farmers to plant the oilseed.

Soybean prices "may remain firm in March, and perhaps the first half of April", thanks to the loading delays of up to 60 days at Brazilian ports which are encouraging buyers to pay up for what supplies are available, largely from the US.

"Manifold logistical problems kept Brazilian soybean exports below the world market's requirements in February and this will probably also occur in the first half of March," Oil World said.

'Price setback'

However, by mid-April, "exports from South America should be in full swing and the US Department of Agriculture planting intentions report may have confirmed the outlook for a record soybean acreage this spring, paving the way for a price setback", Oil World said.

The USDA will at the end of this month unveil its first estimates for domestic plantings, with the resilience - until this week – of soybean prices compared to corn, the major rival in spring seeding programmes, seen encouraging growers to prioritise sowings of the oilseed.

"The severe depletion of US stocks and the recent price development is signalling US farmers to step up soybean plantings," Oil World said, estimating area potentially at a record 78m-79m acres, up from 77.2m acres last year.

'Severe rationing'

Separately, the USDA forecast that the soybean market faces a tipping point when lower prices of soyoil and soymeal, the main products from processing soybeans, prompt a collapse in crushing activity.

"It may not be long before the market sees a considerable weakening of crush margins," USDA analyst Mark Ash said, in follow-up comments to the department's benchmark Wasde crop report on Friday.

With the US requiring a "severe rationing of soybean stocks" - after robust demand in the first half of 2012-13, despite the season's drought-reduced crop - "an unavoidably sharp reduction in February-to-August use is anticipated".

US stocks have already fallen to their lowest since 2004, "yet must still support the domestic market until the next harvest in six months", Mr Ash said.

"Any additional export sales commitments of soymeal this spring could be worsening a domestic shortage by the summer," and mean "unusually large" imports of the feed protein source from Brazil.

Prices dip

The comments come amid a setback in soybean prices, which for May delivery closed 0.7% lower at $14.67 ½ a bushel in Chicago on Tuesday, in part of fears for the longevity of the Brazilian logistical hiccups.

At Phillip Futures, Joyce Liu said: "For as long as the Brazilian port delays last, we see more potential for upside in the old-crop soybean contracts.

"But once the logistical issues are cleared, the sudden influx of Brazilian soybeans may cause Chicago soybean prices to plunge."