Through the winter, the market told farmers to plant corn, and US farmers responded. But, a shortfall in Brazilian soybean production and continued strong export demand from China for soybeans has left the world short of soybeans. “The situation is that we have too much corn and not enough soybeans,” says Dr. Chris Hurt, Ag Economist at Purdue. “World corn production has grown by 250 million bushels and anticipated world soybean production has dropped by about 575 million bushels since the USDA’s intentions survey was completed.” In addition, export demand by China has continued strong. “USDA has increased anticipated corn exports for the current marketing year by 8 percent, while the anticipated soybean exports have grown by a much larger 18 percent,” Hurt said.
This means soybean prices will remain strong well into next year. Hurt told HAT the high is not in yet on soybean prices, “When you look at the stocks to use ratio, they are the lowest since 1965. I think the question is ‘Are we going to take out that $15 per bushel soybean price and move up into the $16 and $17 range?'” The changes in market prices have led to a shift in anticipated crop returns. For example, Purdue crop budgets on March 1 projected returns of $48 higher per acre on corn than soybeans planted on average quality Indiana land. By April 10, the budgets were projecting a $25-per-acre higher return on soybeans than corn. “Grain markets have been asking for more soybean acres, and that request turned into a plea with the latest USDA updates,” Hurt said. “Markets are now in their last-gasp effort to convince farmers to plant more acres of soybeans and fewer corn and spring wheat acres.”
That kind of talk, along with an early wheat harvest, will increase the number of double crop soybean acres this year. “Many Eastern Corn Belt farmers are nearly done with corn planting, but some might be able to shift small acreage,” he said. “The greatest acreage-shifting opportunity lies in the western Corn Belt where corn planting isn’t as far along. This is especially true in Wisconsin, Iowa and the Dakotas.” Hurt estimates that there could be as many as 6.5 million acres of double crop soybeans this year, up from the 4.5 last year. Hurt said in Indiana fields as far north as I-80 could be seeded with double crop soybeans. If there is an acreage shift, we will have to wait a while to find out. The next USDA acreage report will not be released until June 29.[audio:http://www.hoosieragtoday.com//wp-content/uploads//2012/05/hurtsoybeanwrap.mp3|titles=The World Need More Soybeans]
Listen to the complete interview with Dr. Hurt.[audio:http://www.hoosieragtoday.com//wp-content/uploads//2012/05/Hurt-soybean.mp3|titles=Dr. Chris Hurt]