Are soybeans headed for a period of increased price volatility in the near future? Some say market conditions could make the soybean derivatives market more volatile in the short-term – leading to potential risks for both producers and suppliers of the as they attempt to negotiate what could end up being a difficult market to work with in the coming months and years.
In the article published on Nadex by Dynamic Commodities, several conditions were analyzed to show how and why we could see volatility in the soybean derivatives market. For example, higher demand for animal feed worldwide has led to rising demand for soybeans worldwide as wealthier consumers demand more meat in their diets. The higher demand for soybean derivatives is bringing a five-year period of abundant supply in global soybean markets to an end, meaning end users of the products could see a change from the relative sideways movement we’ve seen in the last several years.
While these factors are driving prices higher, according to author Andrew Hecht, the major source of potential price volatility for soybeans will be weather patterns in the United States. These patterns will be the “ultimate judge” of determining market price in the near future.
We found this to be an interesting read this Friday: The full article can be read here: