Soybean Futures Hit Record on Export Demand

As many factors seem to work against soybean production, the soybean futures market is trading well over $17 a bushel as I write this.  Starting with too dry of weather in the Southern Hemisphere diminishing global inventory, this year’s US drought seems to be the final blow with damaged soybean crops eroding even more soybean stockpiles globally.

The fallout on the current soybean situation will mean higher costs for animal feed (for “human feed”), and raise costs to importers – such as China.  With soybean (futures) making record highs, this will have to be passed down to the consumer around the globe.

Barb Levy, chief director of trading for Futures & Options Xecution’s futures division in Chicago, stated this morning regarding the current soybean futures situation, “Reports of higher than expected soybean crop damage in the Midwest, on top of the previous dry conditions last season in South America, continues to push soybean (futures) prices up.”  Levy added, “…demand from end users remains solid despite the higher soybean (futures) prices.”

Soybean futures have no top in sight.  We are currently long soybean oil, but were stopped out of soybean futures and soymeal prematurely yesterday.  I will be looking for lower-risk opportunities to hop back onboard when a clearer soybean futures picture unfolds.

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