Understanding Changes in the Soybean Market

Here's a chart of prices in the soybean market over the last year from AgWeb



What's driving the increasing prices? As George Will notes in a recent Newsweek column, at least two forces are combining to drive up prices. Demand is increasing thanks to rising world population and incomes. Supply is also contracting because many farmers have decided to switch production to agricultural products that can be turned into biofuels.

Rising demand and falling supply = prices going up, up, up.