First Week: 2. Road Ahead

I predicted the price of the soybean will keep rising in the next week. U.S. soybean futures leapt to a record, buoyed by strong demand and concerns that global supplies will remain tight well into next year.

“On Thursday, the U.S. Department of Agriculture said weekly export sales of soybeans totaled 721,300 metric tons, which was at the high end of traders’ expectations, showing that demand for U.S. soybeans hasn’t waned as prices have hit highs.

Such reports, combined with supply squeezed by drought, have made for an explosive market.

‘It’s like watching kindling, and the smallest spark sets it on fire,’ said Sterling Smith, commodity strategist with Citigroup Inc. in Chicago.

The USDA earlier this month projected the U.S. soybean crop will produce 2.692 billion bushels this year, down 12% from last year, due to the worst drought in decades.

Heavy rains from the remnants of Hurricane Isaac are expected to hit the Midwest in the coming days, but because much of the nation’s soybean crop has reached maturity, the rain will be too late to help, meteorologists said Thursday.”(2010-9-25 http://online.wsj.com/article/SB10000872396390444772804577621670354919962.html )

Soybean futures could approach $20 a bushel later this year, said Doug Bergman, vice president and trader with RCM Asset Management in Chicago: “We’ve got too much demand and too little production.”