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In a webcast to clients last week, senior commodities analysts from Fairway Associates explained that a late crop this year, coupled with the fact that August – the pod setting period in the U.S., is traditionally the most volatile period for beans, could lead to large swings in the commodity price.

The U.S. grows more than a third of the world’s soybeans and the country’s inventories are at a five-year low, according to Fairway Associates data. Prices may swing between $8 a bushel and $20, analysts said. The crop, crushed to make animal feed and cooking oil, touched a record $16.3675 a bushel in 2008.

The position of Fairway Associates analysts on soybeans was said to be slightly bullish, given factors such as a lower dollar, low inventories in the U.S., and most importantly perhaps; the prospect of a strong economic recovery in Asia (the primary market for US-exported beans).

Professional Farmers of America, an information company that produces crop estimates, said last week that the U.S. soybean harvest may be 3.15 billion bushels this year. That compares with a government estimate of 3.199 billion bushels.

On recent figures, Fairway Associates confirmed that there are some signals that all may not be well for the U.S. soybean crop, in which case, the supply focus will shift to South America. Argentina, suffering from drought, and Brazil are the largest producers after the U.S. The South American crop is planted in the fourth quarter, after the U.S. crop is harvested.

In closing, the Fairway Associates analysts said that there was a greater chance of a soybean shortage and price spike than for corn, which would also be assumed to benefit from the macro changes. However, corn crops are said to be looking very healthy and would not therefore be susceptible to supply side concerns which may well affect soybean prices.