Soybean prices rallied for a third straight week, nearing one-year highs on Friday. The market is climbing as dry weather continues to plague Argentina, the world’s third-largest soybean exporter. As Argentinian farmers lose more of their bean crop to bad weather, global buyers, like China, will be more dependent on U.S.-grown beans.
This realization prompted the USDA to project tight soybean supplies in the U.S. before this fall’s harvest; in the newest revision, the ending stocks or “carryover” are now projected at 530 million bushels, a figure that could get tighter if Argentina loses more of its crop to drought.
These fears have prompted end users, like livestock feeders, and investors to buy soybeans, while farmers are emboldened to hold onto their soybeans in hopes of higher prices, a phenomenon that is creating the current bull market.
As of midday Friday, March soybeans traded for $10.39 per bushel.