Soybean prices have risen to a record 30 percent this year, a rise that promises to add pain to consumers in the face of the worst food inflation in a decade.
The Chicago Board of Trade’s ongoing contract for soybeans ended trading Thursday at $17.69 a bushel, topping the previous high of $17.68, set in September 2012. when the drought scorched America’s crops. Prices fell slightly on Friday, as traders retreated from many of the markets to follow read hot US inflation increases fear of sharpness Federal Reserve raises interest rates.
Soybeans are perhaps less widely discussed than wheat and corn, two of the other foods that have seen prices skyrocket this year. Russia Invades Ukraine eliminate two major manufacturers. However, their rising costs may be affected by the stretching global food and fuel chains. They are fed to chickens and salmon, as well as pigs and cows, and crushed to make cooking oil and biofuel.
The health of this year’s US soybean crop is seen as the basis for what the world market will do. Traders and end users worry that supply could become scarcer if the weather is bad in the Corn Belt.
Purchase commitments for new-season soybeans – which were planted this spring and just starting to grow – are up 68 percent from this time last year, according to U.S. Department of Agriculture data.
“With world supply tightening, if anything goes wrong with the weather, then prices,” said Don Roose, president of US Commodities, a brokerage firm based in West Des Moines, Iowa. will have to change.
Prolonged La Niña weather pattern is expected to introduce hot and dry conditions into much of the Corn Belt starting this week. While this may help initially by drying out saturated crops in the eastern part of the region, prolonged hot dry periods could take a toll on U.S. production.
Therefore, traders are proceeding with caution. “It was like, ‘Okay, what could happen next? “” said Mr. Roose.
Ukraine is among the top agricultural producing countries worldwide and a leading producer of sunflower seeds and by-products. According to data from the USDA, Ukraine is expected to produce 17.5 million tons of sunflower seeds this year, along with 6.45 million tons of sunflower oil and 6.2 million tons of sunflower meal — before the war does. interrupted farming.
The oilseed stress worldwide has also affected soybean product prices in the US, with soybean oil prices close to all-time highs. Soybean oil futures on CBOT closed trading above 80 cents/pound on Friday, near an all-time high of 87 cents/pound reached in late April after Indonesia enacted a ban on palm oil exports .
Ukraine’s failure to export oilseeds has strained world supplies, prompting other major exporters to halt their shipments for short periods of time. Indonesia, 60% of the world’s palm oil producer, has established export ban in late April to try to keep palm oil at home as importers scramble to find cooking oil after Ukraine abruptly withdrew. That’s what caused the price to skyrocket. Indonesia has since the removal ban.
With oilseeds unavailable in Ukraine and drought affecting crops in South America, buyers turned to U.S. soybeans to fill the gap — and quickly.
“The cash market has decided it wants to get the most out of it,” said Ted Seifried, vice president and director of agricultural market strategy at Chicago-based commodity brokerage Zaner Group.
Last week, Brazil’s state agricultural agency Conab forecast that the country’s crop for the marketing year 2021/22 would total 124.3 million tonnes, down from 138.2 million tonnes the previous year. Argentina’s soybean harvest is also forecast to be lower, limiting its ability to compete with the US in the export market.
Write to Kirk Maltais at [email protected]
While Ukraine suffers from military attacks by Russian forces, analysts are warning that the world’s wheat supply could be seriously threatened. WSJ’s Shelby Holliday explains. Photo: Valentyn Ogirenko / Reuters
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