Grains have traded significantly lower overnight, following a pattern of the past few days. This screen capture of agriculture futures from the Bloomberg website says it all. Just look at all the agriculture futures that are in red letters versus green. In addition, the soybean futures are down nearly $2.00/bushel from their highs just a few days ago, largely on news that Brazil's grain harvests are 2-3% higher than forecast, and continue to be supported by favorable weather conditions there. Of course, any adverse weather conditions in North America during the spring planting season or summer could also drive prices much higher.
Long-Term Outlook Supportive of Prices
Long-term, the CME website indicates that China has recognized that they are incapable of providing sufficient food for their population due to a shortage of arable land. This should continue to provide long-term price support for soybean prices. Also supportive is the report by the U.S. government that U.S. grain stocks are at 60-year lows. That's saying a lot, since that is an admission that grain storage is the lowest since World War II era!
