Shortages in the vegetable oil market are pushing the grain markets higher. Market advisor Mike Krueger says this shortage is two-fold. “People want to be bearish on the soybeans, because there’s talk about record crop production for North America in 2022. Then, they’re already forecasting a record crop in Brazil. On the other hand, canola ending stocks are nearing zero, not just because of the drought, but worldwide.” Increasing biodiesel and renewable diesel demand could be a game changer. “If we start to throw oil demand into the picture, that’s going to support crushing economics for soybeans as well. We set all-time record highs for canola futures in the last month or two. It’s going to take time to get crush facilities online and we may not be able to crush these in the next six months.”
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