Uncertainties inspire variability in soybean prices

Soybean futures prices fell 18 percent over a two-month period this summer before rebounding by 9 percent, writes economist Darrel Good of U-Illinois, who says “soybean prices may continue to trade in the wide range of the past three months.” Soybean futures contracts are trading for around $9 a bushel in Chicago. “The price swings reflect changing expectations about the size of the U.S. crop, uncertain U.S. export prospects, and potential impacts of the current strong El Niño weather event on world oilseed and vegetable oil production in 2016,” says Good at farmdoc daily.

The futures contract peaked at $10.45 a bushel on July 14 and Good says it would require dramatic deviation from the current outlook for abundant supplies worldwide. “Modest short-term rallies based on other factors, however, are more likely,” says Good. Many analysts expect a period of comparatively low market prices after the agricultural boom that peaked in 2012. The USDA, for example, estimates this year’s soybean crop will sell for an average $9.15 a bushel, compared to the record $14.40 in 2012.

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