Unless there is a secret stash somewhere in Argentina or Brazil, the current-season soybean production deficit could soon drive record-high prices even higher. Even before the USDA announced the tightest end-stock levels in five years, 175 million bushels compared with 573 million bushels last year, July beans traded at $13.06 in early January. The rally had been spurred by ongoing droughts in Argentina and China, smaller production levels out of Brazil, diminished U.S. carryover from last year and increased demand out of China, observes Anne Frick, senior oil seed analyst for Prudential Financial. Plus the weak U.S. dollar is driving up prices of dollar-denominated commodities, and rising inflation is pushing the perception that commodities are a good hedge, driving up their popularity with speculators.
展开▼
