So many times, we like to think the fundamental factors influencing grain prices are as simple as whatever is happening with domestic supply and demand. And while maybe as recently as 10 years ago that was the major driver in price, grains are now a part of a global market with all the intricacies that come with being a part of a global market.
Gone are the days where worries over US soybean yields were the only focus. Now to get an accurate feel on what soybean demand could look like, you also need to have a grasp on China’s property market and reserve rate requirements. The butterfly effect in grains these days, where a country banning the exports of a niche commodity can spill over into increased demand of another, is both amazing and terrifying.
