Soybeans to Rally on Bets Farmers Switch to Corn
(Bloomberg) Soybeans are poised to extend the biggest quarterly price rally in two years, as investors have increased bets on the oilseed amid indications farmers may use more land for corn, which is currently more profitable.
The chart “Soybeans to Rally on Bets Farmers Switch to Corn” tracks the net-long positions, or the difference between bets on price gains in soybeans and wagers on declines. The bottom panel shows the price ratio between soybeans and corn near the lowest in more than two years. On average in the U.S., feed for chicken comprises 60 percent corn and 25 percent soybean-meal, according to the University of Georgia’s Department of Poultry Science.
A typical farmer in the U.S. is forecast to earn $372 for every acre of corn planted this year, 42 percent more than earnings from soybeans, according to the Department of Agriculture. The U.S. is the world’s largest producer and exporter of both agricultural products. Corn has become more profitable to grow than soybeans because of higher demand for the grain used in ethanol production, according to the USDA.
Corn’s 71 percent jump from this year’s low in Chicago, spurred by rising demand from feed mills and ethanol producers, may prompt soybean farmers in exporting countries to abandon the oilseed and switch to corn, Tetsu Emori, a commodity fund manager at Astmax Co. Ltd., said in a phone interview from Tokyo. That would cut soybean supplies and boost prices, he said.
“Net-long positions show soybean prices will keep rising because people are now looking at soybeans rather than corn and wheat,” Emori said.
In Argentina, the third-largest soybean grower and exporter, farmers started planting the next crop, with the area sown to the oilseed forecast to drop by about 1.3 percent, the Buenos Aires Cereals Exchange said last week. Argentine farmers were estimated to plant 3 million hectares (7.4 million acres) with corn, 2.4 percent more than forecast earlier, the exchange said Sept. 23. Harvesting of both soybeans and corn is in progress in the U.S.
http://noir.bloomberg.com/
The chart “Soybeans to Rally on Bets Farmers Switch to Corn” tracks the net-long positions, or the difference between bets on price gains in soybeans and wagers on declines. The bottom panel shows the price ratio between soybeans and corn near the lowest in more than two years. On average in the U.S., feed for chicken comprises 60 percent corn and 25 percent soybean-meal, according to the University of Georgia’s Department of Poultry Science.
A typical farmer in the U.S. is forecast to earn $372 for every acre of corn planted this year, 42 percent more than earnings from soybeans, according to the Department of Agriculture. The U.S. is the world’s largest producer and exporter of both agricultural products. Corn has become more profitable to grow than soybeans because of higher demand for the grain used in ethanol production, according to the USDA.
Corn’s 71 percent jump from this year’s low in Chicago, spurred by rising demand from feed mills and ethanol producers, may prompt soybean farmers in exporting countries to abandon the oilseed and switch to corn, Tetsu Emori, a commodity fund manager at Astmax Co. Ltd., said in a phone interview from Tokyo. That would cut soybean supplies and boost prices, he said.
“Net-long positions show soybean prices will keep rising because people are now looking at soybeans rather than corn and wheat,” Emori said.
In Argentina, the third-largest soybean grower and exporter, farmers started planting the next crop, with the area sown to the oilseed forecast to drop by about 1.3 percent, the Buenos Aires Cereals Exchange said last week. Argentine farmers were estimated to plant 3 million hectares (7.4 million acres) with corn, 2.4 percent more than forecast earlier, the exchange said Sept. 23. Harvesting of both soybeans and corn is in progress in the U.S.
http://noir.bloomberg.com/
Posted by Colvin & Co. at 10/18/2010 5:29 AM 
Categories: Food Security
Tags: farming Planting soybeans corn
Categories: Food Security
Tags: farming Planting soybeans corn
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