While soybean prices sold off on Friday, longer term global demand will be the key to price recovery. For most of 2017, the market has been under the pressure of large grain supplies and big production prospects. Jim Bower, with Bower Trading, feels the market is not turning its attention to the expectation of greater world demand, “It feels to me like the global aspect is starting to lift up some of the commodity prices and take the attention away from the supply concerns. We are seeing the U.S. make sales to places we have not done business with for a while.”
Bower says good examples are the wheat market, which had good export sales last week, and the cattle market, which jumped over $3 on Friday. “The real factor that is moving the cattle and beef industry is coming from international demand,” he said. “Other nations want a high quality, safe, and reliable source of beef and dairy protein, and they know they can get it from the U.S.”
Bower says continued global economic growth may be a key to higher market prices in 2018, “With the top 45 nations in the world having a positive growth in their GDP, we are beginning to see for buying power for dairy and meat.”
For more market strategy information, contact Bower Trading at 800-533-8045 or bowertrading.com.
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