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World turns to corn and soybean prices go up

March 19, 2012

 

Since that the drought season in South America started to concern the commodities market in December 2011, the soybean prices are growing step by step and now they reached the biggest prices on 6 months.
 
The lack of rain in Brazil and Argentina, mostly, made the prices increasing on 23, 6%. Last week, soybean contracts for May, for example, went up 3, 21% and were about U$ 13, 8075 per bushel on the CBOT (Chicago Board of Trade).
 
For the sake of comparison, since last December, prices for wheat and corn went up on 13, 63% and 12, 79%, respectively. Till now, the United States Department of Agriculture reduced on 13 million tons the estimative for South America production, which was damaged by the phenomenon La Niña.
 
With this situation, China tends to increase its exports from US, which also faces a problem with lower stocks. So the world market tries to convince North-American producers to plant more soybean, which is going to be planted in the next few months.
 
The perspective, however, seems even darker for soybeans prices because, as some experts said last week, the hot and dry weather in the Mid-west would favor an extra planting of corn, what could make soybean area even lower.

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