While soybean acreage increased 17% from last year, it won’t satisfy the 2009 usage table, having given way to very high-priced December 2008 corn. “The farmer rightfully chose to plant corn at those prices,” says Tom C. Willis of Mesirow Financial. “It was certainly more than last year, but last year was one of the lowest planted acres in soybeans in many years,” he says, and those acres are also likely less productive. “It’s a perfect storm,” he says, adding that a bad energy policy, which promoted corn production, and bad weather have the market on a razor’s edge. “We can’t even afford below trendline yield,” he says, adding that he’s a buyer between $14 and $13.75; and with the momentum traders, tight stocks and a weather disaster, the market could do anything.
Bad weather could lead to limit-up days and an exponential increase in prices, such as when hard red spring wheat hit $25 per bushel, says David M. Fiala, analyst for DTN. “We need an Indian summer. If you can extend the growing season into September, you can add two to five bushels per acre,” and beans could slide down to $12 per bushel as we head into harvest. But for August, he sees solid support at $14 and resistance at $16.36’6, the high from July 3.