Future Prices on Soybeans Expected Higher

Future Prices on Soybeans Expected Higher-Image via Wikipedia

T & K Futures and Options, Inc. believes that soybean futures prices will hit record highs based on the supply tightness in the United States. The profitability advantage for farmers of corn, cotton and spring wheat may limit soybean acreage and high energy prices may lead to increasing demand for bio-diesel.

T & K Futures and Options, Inc. believes that soybean futures prices will hit record highs based on the supply tightness in the United States. The profitability advantage for farmers of corn, cotton and spring wheat may limit soybean acreage and high energy prices may lead to increasing demand for bio-diesel.

The recent USDA report estimated the U. S. soybean stocks to usage ratio at 4.2%. A stocks to usage ratio of 4.2% would be the tightest since 1965. The weak U.S. dollar has made U.S. soybean prices very attractive to foreign buyers like China who also buy from South America. South American production has the potential to alleviate some of the global tightness with a larger than expected crop if all goes well with weather and shipping this year.

There is a current profitability advantage for farmers to plant corn, cotton and spring wheat at the expense of soybeans. Farmers are getting more money per acre planting those three crops than they would planting soybeans making the fight for acreage a losing proposition for soybeans over the near term. A large soybean futures price rally will be necessary to change many farmers’ minds about planting this year’s crop. Visit http://www.tkfutures.com/soybeans.htm to learn more about soybean futures and options trading.

High energy prices that increase demand for soybean oil as bio-diesel may increase along with more profitable prices. Tension in the Middle East and the coming driving season may also help keep energy prices high and therefore soybean oil demand higher for the next few months. Visit http://www.tkfutures.com/education.htm to learn more about the mechanics of futures and options trading.

The author of this article is a 17 year veteran of the futures and options markets and the president of T & K Futures and Options, Inc. Past performance is not indicative of future results. Futures, options and foreign exchange products carry significant risk of loss.

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