It may not be as sexy as gold or oil, but nonetheless soybean meal futures have managed to take the top spot for March in the commodities complex. Front month soybean mean contracts are up 7.7% in March and 21% for the year.
According to this article from the Wall Street Journal, the main driver appears to be lower crop yields from South America with demand from China holding steady. All three soybean related commodities that we track (beans, oil and meal) have risen this year and after a precipitous drop at the end of 2011, are now approaching the highs from 2011.
Regarding the demand side of the equation, if China's growth continues to slow (
which we talked about in our January 17, 2012 post and more recently
the 2012 estimate has been revised down to 7.5%), that will certainly have a dampening effect on soybean prices. If it's enough to counteract supply issues and global currency devaluation remains to be seen.
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