In long-term perspective the market of soybeans is expected to rally.
These are the reasons:
· The reduction of sown areas in the USA, China and Argentina in favor of corn.
· The growing consumption of soybeans around the world, mainly in China (as fodder crop).
Consequently, in the next marketing year we will probably witness an imbalance between the global supply and demand, which will affect the reserves and will eventually make global prices grow.
In mid-term perspective soybeans will be trading in the $12,5-14/b range as currently the market has no reasons to grow or decline.
The short-term and mid-term situation depends on the condition of the US crop, which is currently good. The US export of soybeans for the week of July 21st-28th is equal to 5.8M bushels, which is twice as low as for the same period in 2010.
According to the Department of Commodity Trading, , the price of soybeans will probably stay in the range of $14-13,5 per bushel. On August 11th the USDA is to release another report, which will determine the direction of the future mid-term movement.
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