February 18, 2015
US farmers look to soybean as corn prices performs poorly
A poor performing corn market is driving US farmers to reserve more land for soybeans, Bloomberg reported.
Following two years of record harvest, corn prices collapsed due to surplus in supply, afflicting serious financial losses for some farmers. Reflecting a negative trend, cultivations of the crop will plunged for a third consecutive season, for the first time since the 1970s.
On the other hand, the situation will benefit soy acreages as they grow to its biggest ever, based on a Bloomberg survey of analysts.
Soybean plantings may increase by 2.8% this year to 86.028 million acres, while corn will fall 1.7% to 89.091 million, the lowest since 2010.
However, the higher plantings of soybean could not prevent a 2.8% drop (to 97.95 million tonnes) of US soybean production as compared to last year''s record harvest, said analysts.
In addition, the current popularity race between soybean and corn may reverse; corn could gain upward momentum as the warm periods of early April in the southern Midwest favoured more on the growth of the grain than soybean.
In the meantime, corn futures on the Chicago Board of Trade closed at US$3.9775/bushel on February 18, a 53% drop from a record US$8.49 in 2012.
Soybeans concluded at US$10.1175 /bushel, a 43% decline from a peak of US$17.89.
Also on the fall is 2015''s net-cash income which, according to the USDA, will decrease 22% to its lowest since 1932.