September 17, 2007

Soy prices could inch toward US$10, says agronomist
 

A US agronimist has projected that soy prices, given "right circumstances", could head toward US$10 per bushel around harvest time (October) from the current level of US$8.58.

Else, they are likely to stay stable between US$8.25 and US$8.50.

Chris Hurt, extension agronomist with Purdue University in West Lafayette, Indiana, said in a press release: "Add a dollar a bushel during storage season, and that will push prices to the US$9 to US$9.50 range. If there are growing problems in South America (like possible shrinkage of planting area) and export demand from China is stronger, we could see double-digit soybean prices up in the US$10 range."

Such price rise could divert to soy all the attention hitherto paid to corn during the growing season. He said the marketplace may well pay more to farmers who store soybeans. Soy has a stronger storage return than corn.

Indiana and Ohio corn yields are, however, up from the US Department of Agriculture's August estimate. Hurt estimates corn prices in much of Indiana and Ohio in the US$3 range.

Both corn and soy would have returns for storage capacity, but the priority goes now to soybean storage, Hurt said. Corn prices will increase throughout the storage season, probably 50 to 60 cents, Hurt estimates.

Meanwhile, there's going to be plenty of corn to meet the needs, said Hurt. "In fact, looking back, we have shifted a little too much land over to corn, but this is the nature of the market," Hurt added.

The marketplace will bid very aggressively for needed crops in 2008 and direct the ways which farmers shift their crops, Hurt reports. Right now, there will about an 8 percent increase in the shift to more soybeans in the US and about a 4 percent decline in corn acreage, Hurt added.