Investors seeking clues to the future of soybean futures should look at censuses of China's urban population, which are a close proxy for use of the oilseed – and signal price rises ahead.

Examination of data from the last 40 years shows a strong correlation, of 97%, between China's pork production and soybean consumption, as might be expected given the predominance of soymeal in hog diets, data from Standard Chartered showed.

And there is an even closer correlation, of 99%, between changes in this pork production and in the number of the country's urban dwellers, whose per capita meat consumption is far greater than that of their rural peers.

Forecasts for China's future urban population, linked through hog output to soybean use, suggest that the country's consumption of the oilseed will grow more than 20% by 2013-14, to 87.1m tonnes.

And, with China accounting for some 60% of world soybean trade, "its demand is a key element in shaping the markets' view on prices", Standard Charted analyst Abah Ofon said.

Plugging this into the bank's futures model suggests soybean prices "around the $13.75-14.25 region", he added.

Cost pressures

Also supporting price rises are increasing costs of production in the US, the top exporter, and in particular in second-ranked Brazil, where growers face rising land bills.

"Although Brazil is relatively well endowed with arable land, land rental costs are still likely to rise over time due to competing demand," Mr Ofon said, noting that land accounted for about 12% of soybean production costs in the South American country, as opposed to 30% in the US.

Furthermore, the country's poor transport system meant farmers faced a charge of $122 a tonne, equivalent to $3.25 a bushel, to get soybeans from the north of Mato Grosso, the top producing state, to southern ports.

That is nearly double the price, per mile, as in the US, and more than twice the costs of shipping to China.

"While there are tangible gains to be made from better soil management practices in Brazil, land and transport costs will limit the competiveness of soybeans from Brazilian origins," Mr Ofon said.

These costs rises suggested a "firm floor" for prices at about $9.50 a bushel.

'Case for a bull market'

The analysis prompted Standard Chartered to lift to $13.50 a bushel, from $13.06 a bushel, its forecast for average Chicago soybean prices, as measured by the near-term contract, in 2012.

The bank recommended buying the March contract, which traded on Monday at $12.25 a bushel, with a $13.50-a-bushel price target.

"Prices within a band of $9.50-12.00 a bushel represent good value for soybean consumers as this reflects marginal cost in the industry and as we expect the price aspiration for producers to be much higher," Mr Ofon said.

"The case for a bull market for soybeans is robust."

Goldman Sachs has also voiced particular optimism over prospects for soybean prices.