Soybean market resilient in face of record South American crop
The soybean market has shown resilience to bearish news out of South America.
Analyst Jeff Peterson with Heartland Farm Partners says prices have not collapsed despite a record crop in Brazil.
“Everybody is a little bit confused about the soybean market because what everybody had been saying is that once South America, in particular Argentina, started getting rains we’d start to see that market going lower. But we’ve continued to add strength.”
He tells Brownfield that’s mostly because of strong soybean meal demand.
“Soybean meal, the speculative trade, they don’t have a record position on it but they’re getting that close. And that’s been bringing up the demand.”
And he says a slow start to the Brazilian harvest is also friendly to soybean prices.
“That’s basically allowing a few more ships to get shipped, a little more demand to come in from China to the U.S. And I think based on what our expect pace is, we’re a little ahead of pace to go ahead and hit our numbers, and I think some are (thinking) ‘we don’t dare let this market get too low.”
Because if it does, Peterson says the U.S. soy balance sheet might not be big enough to handle demand.
Brownfield interviewed Peterson during the Iowa Ag Expo in Des Moines earlier this week.