Encroaching corn acreage and the developing viability of soybean oil based biodiesel has helped push May beans above $8 per bushel, and traders are eager to see the March 30 planting intentions report to give them some insight as to how many more acres farmers will be giving up in favor of corn.
“But that trade will last 15 or 20 minutes at best,” says Joseph E. Victor, vice president of marketing for Allendale Inc., indicating the reduced acreage may already be priced in. “After that is known, the trade is going to focus on springtime weather.” And Victor, based on private forecasts, anticipates some planting delays for corn. That would be bearish for beans, which also are facing near record crops coming out of South America. Victor suspects the high for the May contract is in and sees plenty of volatility during April. He pegs the high at $7.92 and expects the market to try to fill the January gap between $6.91 and $7.10.
Others are more bullish. “We don’t think there’s a top yet in the May
or the November beans,” says Richard Brock, president of
Brock, however, is concentrating on new crop beans. He says
the planting intentions report will be between 59 million and 59.5 million acres. “Anything below
57 million and it’s ‘Katie bar the door.’ I can’t see new crop beans getting below $7.60 between now and November.”