A mix of factors contributing to global U.S. soybean demand
A grain market analyst says several global factors are increasing demand for US soybean exports.
Brownfield’s Kellan Heavican reports from Kansas City.
Brian Splitt with AgMarket.Net tells Brownfield warm and dry growing conditions in Brazil, Argentina, Paraguay and Uruguay are causing China to turn to the U.S . “The Chinese that many believe are caught short of owning their physical product. They know they need to procure a certain amount of soybeans. Their concern for the South American growing potential is causing them to come in and buy U.S. soybeans.”
Splitt says inflation is another factor. “You’ve got commodities substantially outperforming equities, so the inflationary environment essentially means we’re looking at the value of hard assets increasing in value and because of that we have a good amount of underlying support under the market.”
And, he says that support is about a dollar below the current market. “If that type of move would bother you, then this is an environment then we should find ways to protect these recent realities and allow to capitalize on higher rallies should they come.”
Brownfield interviewed Splitt at the AgMarket.Net meeting in Kansas City.