Corn prices are going down while soybean prices head up.
New-crop corn and soybean prices are two completely different stories right now.
Take a look at the support under September 2014 Soybeans.
In comparison, look at the December 2014 Corn chart:
Jerry Gulke, president of The Gulke Group, says these markets are confusing to some. Even though UDSA estimates 73% of the U.S. corn crop is planted, states such as North Dakota, Minnesota, Michigan and Wisconsin are way behind schedule. In these areas, Gulke says, there may be as much as 3 million corn acres lost.
"The market is saying, ‘we don’t care if you plant the corn or not,’" Gulke says. "The general thought is 90 or 91 million acres of corn will be enough, and the weather pattern this summer looks conducive for corn yields."
Soybeans, on the flip side, are going higher—even though soybean acres are forecast to be 6% higher than 2013. "The market seems to be telling us that we need a good amount of corn acres, but we also don’t want to run short on bean acres," Gulke says.
Hear Gulke's full audio analysis:
USDA forecast 81.5 million acres of soybeans for this year and a national yield of 45 bu./acre. "That would be almost a record yield for the last few years," he says. "If you get 2 bu. less than that it is a good crop."
But, we have to grow it first, and the market wants insurance the crop is coming, Gulke says. "The market has generally accepted that we’ll plant 1 million less corn acres and 1 million more soybean acres than USDA’s estimate," he says.