Advertise in Print | Subscriptions
Published March 04, 2008, 12:00 AM

Soybeans separating from corn, wheat

All of the commodity markets continue to trade at very high levels, but the soybean market has started to separate itself from corn and wheat in recent weeks.

By: Mike Krueger, The Jamestown Sun

All of the commodity markets continue to trade at very high levels, but the soybean market has started to separate itself from corn and wheat in recent weeks.

Soybean futures have been setting new all-time highs almost every day recently. Some analysts find this unusual because we are getting close to the soybean harvest in Brazil and Argentina. Typically the demand for U.S. soybeans declines once soybeans from South America are available to the world market. That might not be the case this year even with another record soybean crop in the Southern Hemisphere.

Oil World is probably the most respected oil seed publication in the world. It is published in Hamburg, Germany, and is considered to be the authority on world oil seed markets. Oil seeds include everything from soybeans and canola to flax and sunflowers. The latest edition of Oil World estimates that soybean supplies in the four largest soybean producing countries will fall by 30 percent from last year by the end of August. This is amazing because it will include a record large harvest in Brazil and Argentina.

Part of the problem is that supplies of soybeans in this country could drop to the smallest level ever by late August. Farmers planted 10 million acres less soybeans last year and that drop in production was very significant. In addition to a smaller U.S. soybean crop, world demand has been accelerating, especially in China. Soybean prices are now over $14 a bushel and demand still hasn’t slowed. In fact, China’s soybean imports in January were over 30 percent above year ago levels. This is why the acreage race is so important. Soybeans need to get eight to 10 million acres back from last year and no other crop can afford to lose acres.

Krueger is the host of “The Money Farm,”

a syndicated radio and television program on grain marketing and is a licensed commodity

broker. He can be reached by e-mail at

mike@themoneyfarm.com.

Tags: