World oilseed markets are being tugged along behind charging livestock feeding demands.
That’s why soybean prices are likely to be better than canola prices in the short term, according to Archer Daniels Midland’s director of economic research.
And that’s why livestock industries will set the trends in crop markets.
“Livestock is what eats the corn and the (soybean) meal,” said Parry Dixon in an interview after his speech to the Canadian Wheat Board’s commodity outlook conference.
Some analysts expect canola prices to outstrip rises in soybeans because canola is now trading at a historical discount to soybean prices.
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But Dixon said soybeans will continue to be relatively expensive compared to other oilseeds because there is heavy demand for the meal.
Meal, not oil buyers are driving the market.
Canola will eventually regain its usual spread to soybeans, but that will occur only after soybean meal demand has been met or rationed out of the market.
Meat and animal product de-mand is growing in developing nations far more than is demand for vegetable foods and far more than it is in developed nations, Dixon said.
