Though a stronger U.S. dollar is pushing grain and oilseed prices lower, a supportive factor remains to the east, where rail capacity for soybean meal is bottle-necked.
Iowa Soybean Association Director of Market Development Grant Kimberley says the demand is there. At this point in the year, he estimates about 6 million tons of soybean meal exports are on the books, which is half again as much as last year's exports at this time. Kimberley says whole bean exports are also more than a whopping 2.8 million metric tons this week alone.
He says, "What industry sources are telling me is the domestic market, in particular the poultry producers in the southeast, were caught off guard assuming prices would be going lower than what they did. And they needed to bid up the demand here. They needed to bid the price back up in order to secure their supplies away from the export market. So really we've had a slower harvest out east, coupled with very strong international demand and also strong domestic demand and it's just all coming together at the same time."
Kimberley adds the availability of rail cars in the eastern Corn Belt has little to do with competition from cars hauling other commodities, which he says is more of a concern for the western and central Corn Belt. He says the real issue is demand, which he doesn't think will be going away anytime soon.
"Global demand is very strong right now, domestic demand is very strong. There's a demand for protein in the world. And even though we're going to have record crops this year, we're going to sell a lot more than we ever anticipated at this time."