Trucks destined to haul Brazil’s soybean crop remained idle last week, as haulers continued to strike against high government diesel prices. The result was a double-digit rally in U.S. soybean futures prices and the potential for more foreign buyers of U.S. beans, notes Bob Burgdorfer, senior editor of Farm Futures.
Those prices, seen Thursday, remained up at the close of futures on Friday. Old-crop soybean futures closed at between $10.30 per bushel for March and $10.10 for September. November new-crop futures remained below $10, closing at $9.96.
“Failure by government negotiators to settle a Brazil truck strike sent U.S. soybean futures higher on Thursday,” Burgdorfer says, adding that “a prolonged dispute in that South American country could turn foreign buyers of soybeans to the U.S.”
Trucks haul about 60% of Brazil’s soybean crop, which is coming on strong. There was talk of the truck strike ending mid-week. But it continued on Thursday and Friday.
“Opinions (of strikers) changed on Thursday after the two sides failed to settle their differences,” Burgdorfer says. “The truckers want relief from high fuel prices and road tolls and apparently the government offers were not enough.”
In observing other soybean market information, USDA reported last week that the 2014 U.S. soybean crop was valued at about $40.29 billion, based off an average national price of $10.20 per bushel. That compared to $43.48 billion for 2013, with an average price soybean of $13.
USDA reported the 2012 soybean crop was valued at about $43.73 billion, based off a $14.40 average price. Value of the 2015 crop is in question, with an expected increase in 2015 soybean acres.
Farm Futures sees further pressure on U.S. prices, noting that the projected U.S. carryout is still large (unless the 2014 crop was significantly smaller than previous estimates), while a huge crop is hitting the market from South America.
“If growers increase acreage this spring in the U.S., a train wreck is ahead,” Farm Futures says, pointing out that farmers should watch for price spikes, as “history suggests a rally at some point as the market tries to carve out lows.”