After trading near $16 per bushel in early March, May soybeans dipped to below $11.50. Victor Lespinasse, analyst for Grainanalyst.com., attributes the sell-off to profit taking but adds, tight ending stocks and a long growing season will keep weather premiums high. So he’s looking at the spreads. “November beans price vs. December corn price, the ratio is two to one. That strongly favors planting corn. The normal ratio would be 2.25 or 2.4 to one,” Lespinasse says. “A lot of people think that is what’s going to happen; never mind the planting intentions report. That’s written in sand.”
He adds that cold wet weather could push beans down but dry weather could draw acres to corn, pushing prices near the $15 high.
“All the acres are going to go into beans at the expense of corn. It’s the opposite of last year,” says Stephen Davis, broker for RJO Futures. “We are going to back and fill and the only thing that would stop us is Mother Nature.” For May, he says support is $12 per bushel and resistance is $13.
Tom McKenna, merchandiser at Scoular Grain, says U.S. bean prices have been supported by the Argentinean farmers’ strike. They have shut in crops, protesting a new tax on export goods. “Farmers are good at responding to what the market does,” he says, and ultimately beans will be dependent on corn and weather.
