Brisk demand from China and tight supplies has propelled a 50% rise in US soybean prices since mid-August, according to the United States Department of Agriculture (USDA).
After falling back a tad from late-November highs, prices in December continued to rise. Cash prices pushed past $13/bushel in early January in tandem with futures prices that rose above $13.50/bushel.
Rebounding demand for pork feeding in China as well as uncertainty over shipments from Argentina as issues impacted cargo loading at ports have fuelled the price rise.
Dry weather in South America has also supported higher prices. Soybean supply-demand in Brazil remains tight despite increased imports supplementing domestic output.
Recent rains in the country have alleviated the situation, though total rainfall remains below historic average levels.
With a lower US soybean harvest estimated this month and reduced carry over stocks forecast for the 2020/21 marketing year, support for current price levels is expected to remain strong.
Expectations are that the prices may decline in coming weeks once the Brazilian harvest begins in earnest. While this will alleviate some of the price woes for consumers, prices are unlikely to revisit the depressed levels seen prior to August last year.