China's growing middle class has propped up sales of luxury goods and box-office receipts of Hollywood blockbusters in recent years. Add another beneficiary to the list: Soybeans.
Prices of the oilseed are on a tear this year after a torrid 2015, helped by buoyant demand from the mainland that has exacerbated supply disruptions due to weather uncertainties in Argentina and Brazil, two major producers of the commodity.
Benchmark soybean futures on the Chicago Board of Trade are up 14 percent this year-to-date to 1,009 U.S. cents a bushel and there may be further upside if the dry weather doesn't improve in the next few months, said Ariel Haendler, senior trader at Nidera Group. Prices fell almost 15 percent in 2015.
Even though seed technology has improved yields dramatically, Chinese demand for soybeans is strong.