Soybean prices may fall further

 Resize text         Printer-friendly version of this article Printer-friendly version of this article

When it comes to soybean prices you may have not seen the bottom yet.

“I’m more worried about soybean prices falling than I am about corn,” says Matt Roberts, an Ohio State University Extension agricultural economist. “Soybean cash prices are currently about $5.40, but I believe there is a real possibility the prices will fall, and we won’t see the low until about March or April.”

Roberts said that high prices of nitrogen fertilizer might drive producers to switch from corn to soybean production. Analysts are predicting a 1.5 million to 3 million acre switch from corn to soybeans next year. The result would likely weaken 2006 soybean prices.

Additionally, Roberts speculates that the current soybean prices are being based on the probability of a short South American soybean crop — a prediction that he believes is too early to make.

“The prospects for price after harvest are very dependent on the prospects of South American soybean production. This year we have seen Brazil reduce its acreage and dryness develop in Argentina. My worry with U.S. soybeans is that I believe current prices are already assuming a significant amount of harvest disruption in South America, which I believe is too early to back up,” said Roberts.

“All of these factors make it difficult to justify prices anywhere near where we are now. One has to look at the factors driving the price and determine how realistic those factors are,” said Roberts. “I would argue that the current situation is more indicative of cash prices at $5. Cash prices at $5.40 cannot be justified by current U.S. supply/demand fundamentals.”

Ohio State University


Comments (0) Leave a comment 

e-Mail (required)


characters left

6D Series

John Deere offers four models in its economical 6D Series Tractor lineup: the 105 horsepower 6105D, 115 horsepower 6115D; 130 ... Read More

View all Products in this segment

View All Buyers Guides

Feedback Form
Leads to Insight