Soybeans Soar on Argentine Drought

Soybean prices popped to a one-month high as traders assessed worsening weather in Argentina. The South American nation is the world’s third-largest producer of soybeans and a major competitor for U.S. exporters, but its farmers are being hampered by drought, which is delaying the planting of their summer bean crop.

This concern pushed beans over $9.80 per bushel on Friday, a welcome relief to U.S. farmers sitting on stockpiles after last fall’s record-breaking harvest.

Soybeans are grown primarily for animal feed; the soybean is crushed and split into soybean oil and protein-rich soybean meal, which is fed to animals worldwide. Record large livestock herds in the United States and rising hog production in China continue to provide steady demand for soybeans. Soymeal reached a five-week high Friday at $334 per metric ton.

Meanwhile, soybean oil is increasingly being used to make biodiesel, an environmentally-friendly fuel that can be used alone or mixed with conventional diesel fuel. For now, bean oil production is outpacing demand, keeping prices for the byproduct low, trading for a mere 32 cents per pound.