Global soybean prices hit an all-time high on Monday in the wake of continuing hot, dry weather across the US Midwest. In addition to pushing prices higher, the drought and subsequent declining soybean stocks and lower expected exports are also causing a period of excessive price volatility in the commodity. It is the first time such a period has been seen for soybeans since December 2010.
The Soybean Excessive Food Price Variability Early Warning tool has been seeing excessive levels of price volatility since July 9. The US drought has been particularly devastating because it followed the year's earlier drought in South America, which drastically cut export expectations from that region. Extreme heat and dry weather in Argentina in particular cut that country's 2011-2012 soybean crop to a 3-year low of 42.5 million tons. Hamburg-based oilseeds analysts Oil World has forecast that global soybean supplies may be insufficient to cover demand in the coming months.
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