Beans, beans, beans, beans, spam, corn & beans

When the USDA picked farmers brains on the first of March about 2008 planting intentions, they were thinking you would probably plant more soybeans. Prices were about two and a half times the price of corn, and as a matter of fact they could not remember when soybean prices were that high. Beans, beans and more beans all came to fruition Monday.

11.162 million acres more beans than 2007 popped up in the Prospective Plantings Report issued by USDA. That was an 18% increase in soybean acreage, all the while 2008 expected corn acreage dropped by 8% from last year, representing 7.586 million fewer acres. Both estimates shifted more than the market expected.

At the University of Illinois, Extensions’ Darrel Good says soybean supplies should be able to meet the demand, “If 74.8 million acres are planted, harvested acreage might be near 73.8 million. With a national average yield near 42.5 bushels, the 2008 crop would total about 3.14 billion bushels, 115 million more than the level of consumption expected during the current marketing year. Current price relationships suggest that actual planted acreage of soybeans in 2008 should fall short of intentions.”

Since the survey was taken by USDA in early March, the bean market has lost $3 and the report was met with a 70 cent limit down move on Monday. The bean:corn ratio is now less than 2:1. Continued weakness in the bean market may turn some acres back to corn by the time planting time rolls around.