How long can the era of high demand for soybeans (and corn) and corresponding high prices last? During a recent webinar, Jim Sutter, CEO of the United States Soybean Export Council, wondered aloud whether the soybean market and commodities markets in general are entering into a “demand super cycle” like the one a few years ago that fueled a worldwide boom in commodity prices.
As Sutter pointed out during another webinar on the latest World Agricultural Supply and Demand Estimates released March 10, a couple of years ago at this time, farmers were looking at a carryout of a billion bushels of soybeans. Today it’s a tenth of that.
At the moment, soybean prices are slackening a bit as world demand shifts to South America. But during a special Soy Suite web event, Bo DeLong, vice president of The DeLong Company, said, “We expect demand for soybeans to remain quite strong.” He expects to see an increase in soy acreage this year. He said customers may hesitate at higher prices but “will just have to accept them.” DeLong is an integrated AG logistics company that specializes in shipping containerized soybeans.
When asked which countries will be increasing their imports of United States soy, DeLong promptly named China and southeast Asia. He said non-GMO, No. 1 and No. 2 beans and higher-protein beans all promise “enormous growth markets” in that region. He added that DeLong is “always looking for markets that want something differentiated, not just commodity beans.”
In the longer term, it’s not just that China continues to rebuild its hog herd and that Southeast Asia is coping with new outbreaks of African swine flu—although both are true.
It’s because marketing organizations like USSEC are seeking new regions where the demand for livestock feeds is high globally. As long as people consume livestock, Soybeans will remain in high demand. High Plains Journal