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Worldwide Shortage that Nobody’s Talking About

Thursday, 12 Jul 2012 | 6:32 PM ET

You know about the dwindling corn crop but there’s another shortage that you probably don’t know about, and it could be even worse.

According to Jim Bower of Bower Trading investors need to turn their attention to soybeans .

In a live interview on CNBC’s Fast Money Bower says what’s done is done in corn. But soybeans are moving into a key period for harvest.

“The critical time for soybeans is the last two weeks of July and first three weeks of August. If soybeans face the same parched weather conditions as corn, the price of soybeans will go wild,” he says.

Protein Shortage Ahead?
Carl Icahn upped his stake in Navistar, with the Fast Money traders; and Barclays and Goldman Sachs are increasing their price forecast for grain futures as corn continues to rally, with Jim Bower, Bower Trading. "If this weather stays inflammatory, and we keep dropping this yield down on soybeans, we could be faced with a protein shortage worldwide in the months to come," says Bower.

And from what we can tell from the latest USDA crop report, that's entirely in the cards.

The USDA says soybean conditions characterized as good-to-excellent are currently at 40 percent, down from 45 percent the previous week. And in its July crop report the government estimated 2012 U.S. soybean production at 3.050 billion bushels, down from the previous forecast for 3.205 billion.

As things stand right now this year’s soybean crop may be the worst since 1988. And if the weather stays hot and dry the implications are massive. Not only are soybeans used to make fuels and feed here in the US but our nation is a major supplier of soybeans to China.

“If the yield in soybeans keeps dropping at this rate, in the months to come we could be faced with a protein shortage worldwide,” says Bower.

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Posted by CNBC's Lee Brodie

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Trader disclosure: On July 12, 2012, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karen Finerman is long AAPL; Karen Finerman is long BAC; Karen Finerman is long JPM; Karen Finerman is long WMT; Karen Finerman is long TGT; Karen Finerman is long GOOG; Karen Finerman is long NFLX; Karen Finerman is long M; Karen Finerman is long CMI; Karen Finerman is long CMI CALLS; Karen Finerman is short SPY; Karen Finerman is short IWM; Karen Finerman is short MDY; Joe Terranova is long VRTS; Joe Terranova is long MCD; Joe Terranova is long PNC; Joe Terranova is long USB; Joe Terranova is long TCBI; Joe Terranova is long SBUX; Joe Terranova is long MNST; Joe Terranova is long NKE; Joe Terranova is long WFM; Joe Terranova is long MAR; Joe Terranova is long AAPL; Joe Terranova is long EMC; Joe Terranova is long NXPI; Stephen Weiss is long CAT; Stephen Weiss is long VZ; Stephen Weiss is long TOT; Stephen Weiss is long BCE; Stephen Weiss is long DVN; Stephen Weiss is short X; Stephen Weiss is short JCP; Stephen Weiss is short PCAR; Guy Adami is long C; Guy Adami is long GS; Guy Adami is long INTC; Guy Adami is long NUE; Guy Adami is long AGU; Guy Adami is long BTU; Guy Adami is long MSFT; Guy’s Wife works at Merck

For Charlie Bobrinskoy
Charlie Bobrinskoy is funds long MS
Charlie Bobrinskoy is funds long GS
Charlie Bobrinskoy is funds long KKR
Charlie Bobrinskoy is funds long JPM
Charlie Bobrinskoy is funds long BAC

For Jim Bower
Jim Bower is long Corn
Jim Bower is long NATGAS

For Linda Bolton Weiser
Nothing to Disclose

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