As the remarkable year of 2008 ticked to a close, "corn's move to higher profitability—if preserved through the spring—was probably sufficient to forestall a downturn in plantings, or even encourage a small uptick in plantings,” said Lewis Hagedorn of J.P. Morgan.
As the chart shows, comparative prices (with soybeans at 2.3 times corn) favored soybeans in November, only to dip to the 2.0 area, favoring corn, in December. They are now back in an area of ambiguity.
"Based on our price outlook and implied profitability analysis, we maintain that soybeans will lose or at best maintain current acreage in 2009,” he says. "But the increasingly placid inventory outlook suggests a less bullish price response than might earlier have been expected.”