The South American soybean crop will factor into what North American farmers plant this spring, according to a crops economist at North Dakota State University.
"We're just now starting to get into the key reproductive stages for South American soybeans, so the weather forecasts from now into March will be very critical. We'll get a general idea of if we'll get average yields or not," explains Frayne Olson. "If they don't get the big bushels that everybody is expecting, it means soybean prices will increase, and they'll will have to try to buy, or at least hold, more acres in the States to maintain the reserve we need in the pipeline."
He says the market right now is assuming the corn will win the acreage battle, but he says soybeans could take the lead if the South American crop does not pan out.
"Of course, if soybeans start to go up, corn will have to battle and hold their acres. Wheat will have to do the same thing," he says.
The status of the drought-stressed winter wheat crop will also impact what farmers will plant.
"As it starts breaking dormancy, are we going to have to enough rain to get that crop re-established and growing aggressively? We need the bushels, so if that doesn't happen, the only alternative is to buy more wheat acres in the northern plains and into the prairie provinces," he says.
Olson says one thing is certain: traders are counting on large crop production in 2013.
"If you work the math backwards, and say given today's prices, what do we have to assume about the size of crop we need to get those price levels? You have to have a very large corn crop and a pretty darn good soybean crop to get today's prices," he says.
Sun, Apr 21, 2:00 PM
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