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.
Florida freeze threatens OJ
As bitterly cold temperatures descended across the U.S. this week, even the Sunshine State felt the chill. Temperatures dropped below freezing across much of Central Florida on Wednesday and Thursday night, threatening the state’s crops.
Growers attempted to protect their plants by spraying them with water, forming a protective cocoon of ice, but temperatures as low as 25 degrees may have damaged their oranges, grapefruits, strawberries, and other crops.
Futures markets on frozen concentrated orange juice reacted sharply to the weather, cracking to a one-month high on Friday over $1.45 per pound. It may be a while before citrus growers can fully assess the damage, potentially making the OJ futures volatile.