In the February World Agricultural Supply and Demand Estimates (WASDE) report, corn exports have been on the rise while soybean exports are lagging behind.
According to Jim McCormick, senior trading advisor and broker at Allendale, Inc., export sales are 13 percent behind 2017’s pace. As of early February, if the trend continues, he expects to miss the mark by 300 million bushels.
“Talking to a lot of banks and lenders, the balance sheets are tight [in the Midwest], and it’s pushing guys [to plant] beans,” he said on AgDay. “We’re probably going to see an increase of bean acres when we really don’t need it due to the weak demand.”
There’s been a lot of discussion about the crop situation in South America. Weather in Argentina has been dry, and McCormick expects to see the crop lose 5 to 6 million metric tons of beans.
However, conditions have been ideal in Brazil for soybeans. That crop is rumored to be one it’s best. McCormick thinks that crop could offset the Argentinian losses.
“The fact of the matter is if we lose 2 or 3 million metric tons, considering we’re at 75 [million metric tons] two years ago, it shows we’ve got an over abundant supply—unless somebody has a major hiccup,” he said.
Some analysts believe soybean acres will surpass corn acres in 2018. McCormick thinks there could be close to 91 million acres of soybeans, and if the price remains at the $10 level, there could be more acres planted.
Hear his full comments on AgDay above.