Soybean price continues upwards

It is still very dry in Argentina and southern Brazil. Analysts expect that the soybean area may therefore be considerably smaller than previously thought. Although some precipitation fell in Argentina last week, it was not enough to stop the rally on the stock market. On the CBoT in Chicago, the price rose to $12,63 per bushel, the highest level since June 2014. That month, soybean prices stood at $12,80 per bushel.

Moreover, not only does the drought have an effect on the ever-increasing price of soybeans, a strike by a large group of Argentine farmers and inspectors also plays a role in this. This has disrupted, among other things, the export of soy oil and soy meal. This while there is a lot of demand for soy worldwide. China can be seen as the instigator of the rally. This country has been asking for grain for months in order to bring the pig herd back to 'normal' levels. According to estimates from the United States Department of Agriculture (USDA), China will import approximately 2020 million tons of soybeans in the 2021/100 season. That is an increase of 21% compared to the 2018/2019 season.

Further increase expected
Looking ahead, it is expected that the end of the increase is not yet in sight. The unfavorable weather in South America will push prices up even further in early 2021. "The fact that we are experiencing La Niña and there is little activity visible on the surface of the sun will likely mean that we see less precipitation," said meteorologist Joe D'Aleo. As a result, soybeans in certain regions of South America may be irreparably damaged in January and February.

In other words: supply will decrease sharply, while demand is not immediately expected to weaken. Analysts expect this to increase soybean prices by more than 2021% in the first quarter of 40. Prices are expected as high as $18 per bushel, a significant increase from the current $12,63 per bushel.