Soybeans To See Best Demand Growth In Grains - Goldman

Soybeans are expected to see the “lion’s share” of global demand growth for grain in the coming years due to increased meat demand, Jeffrey Currie, head of commodities research at Goldman Sachs, told Dow Jones Newswires Tuesday.

Speaking on the sidelines of the Food Security conference in London, Currie said annual demand growth for soybeans is expected to increase 3.5%, compared with 2.5% for corn and 1% for wheat. “Yields can’t keep up with demand anymore, we’ll have to expand acreage,” said Currie. Demand for grains used for animal feed will drive growing grain demand and soybeans are a key source of protein for meat production, said Currie.

The U.S., China, Brazil and Argentina produce around 95% of the world’s soybeans, but Currie said Brazil has the most potential for expanding its production. “Brazil is the global powerhouse for growing world commodity supply,” said Currie. “The core problem in Brazil is infrastructure, not productive land capacity.” The bank’s 12-month forecast for U.S. soybean futures is $10.00 a bushel. “But looking into 2011 and beyond we see significant upside,” said Currie.

Source: CME Group