Growers in the U.S. are preparing to sow the fewest acres of soybeans in 10 years. At the same time, demand is rising, creating conditions that traders say may double this year’s average price of $5.98 a bushel and allow soybeans to replace corn as the best- performing farm commodity.
Well maybe not the best performing. But the article goes on:
“As more acres are diverted to corn, the picture for the soybean balance sheet gets tighter and tighter,” said William Plummer, who manages $106 million of commodity futures at Range Wise Inc. in Chicago. Plummer said he is “likely to triple my corn position and double beans,” probably early next year.
Not everyone is convinced there will be a soybean shortage. Brazil and Argentina, who together account for 43 percent of the world’s supply, may produce bigger crops, and a price rally before U.S. planting begins by April may encourage farmers to cancel plans to switch to corn. Soybeans are the world’s fourth-largest crops by acreage, after wheat, rice and corn.
Posted: December 26th, 2006 under General.
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