Friday, April 9, 2010

Soybeans Up on Weak Dollar

Soybean Inventory

In a move that is based solely on the weakening U.S. dollar, soybeans increased for the third time in four days, as U.S. exports become more appealing with the fall of the greenback.

Unless something extraordinary happens with the weather or geopolitically, this could be the last big upswing for soybeans for some time, as they have fallen 9.2 percent over the last year, and nothing in the fundamentals has changed to make that any different in the next year.

The global inventories continue to increase as well, with the latest figures showing as of September 30 they should reach 62.96 million metric tons, up from the March soybean inventory levels forecast of 60.67 million metric tons for September.

Of course the one wild card is how weak the U.S. dollar will become, as the Greece debt crisis has it going back and forth, depending on whether investors seek safety in gold, yen or the dollar.

Increasingly the haven of choice has been gold, even when the U.S. dollar increases. While that won't help soybeans, in the seasons when the U.S. dollar does go down, it does.

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