The U.N.'s Food and Agriculture Organization announced a drop in global food pricing, but soybean futures have been resiliently holding at their highest levels in almost four years.
Soybeans rose to their highest since July 2008 this month, and are expected to continue to rise on tightened supply. Diminished stockpiles are also driving corn prices higher, according to several media sources.
The output for soybeans globally are expected to drop 9.5 percent to 240 million tons in the 2011/12 year, hit by poor soybean crops in the U.S. and South America, according to the FAO. The drop in supply was also one of the steepest year-on-year falls on record.
Given that the U.S. corn market is expecting one of the largest crops in history this year, the heightened competition only adds to the likelihood of a continued upswing in soybean pricing for 2012/13.
"We think that the soybean price, reflecting the tightness of the market, has the potential to increase, so there is now a lot of attention to 2012/13 planting intentions," the FAO's senior economist and grain analyst Abdolreza Abbassian told Reuters.
The drop in world food prices arrived after three months of rising food costs. Prices had sank in the second half of 2011 but the rebound in pricing came in January.
by RTT Staff Writer
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