Soybeans
Rise to 19-Year High as China Plans More Purchases

By William Bi and Madelene Pearson (Nov 15. 2007)-Bloomberg

“Soybean futures for January delivery rose as much as 3.75
cents, or 0.4 percent, to $10.8325 a bushel on the Chicago Board of Trade, the
highest since June 1988, and traded at $10.775 at 5:57 p.m. Beijing time. Most-active futures jumped 62
percent in the past year after U.S.
farmers planted the smallest acreage in 12 years to sow more corn.”

``In this market, the risks are that any problem will see
higher prices; those fears will remain as we go into 2008, as there's just too
much demand around.''

This article summarizes the current commodities market of
both soy and wheat. Each crop has seen over a 50% jump in price in recent
months as the world is pressed to expand food production and climate
uncertainty affects crops across the globe. We have seen the price of major agricultural
commodities reach record highs in 2007 due to large portions of U.S. cropland diverted
to corn and because developing countries are coping with increased demand for
better diets. Since many countries around the world find themselves unable to expand
domestic production they are forced to import agricultural commodities from the
U.S.
While global import and export is a quick short term plan to stave off starvation,
it is likely to spell trouble in the coming months and years as crude prices
reach record highs nearing the $100 a barrel, making ocean freight
transportation more expensive and thereby increasing the imbedded cost of food even
further.