By Joanna Newman
AS spring planting gets under way in the northern hemisphere, some US farmers who find their fields too wet to plant maize may decide to switch acreage to soya beans.
While adverse weather is pushing maize prices higher amidst fears of planting delays, it is having the opposite effect on soya beans.
Any additional soya bean acres will further swell the record oversupply of beans and this concern is depressing the futures market.
The Chicago May futures contract has stagnated in recent days, closing on Tuesday (4 May) at 478.5¢/bushel, almost unchanged from 478.0¢ a week ago.
Maize on the other hand, has enjoyed a very strong performance.
The cornbelt has already received slightly above average precipitation in certain areas and the short-term forecasts point to more rain.
To date 3% of the soya bean crop has been planted, compared with a five-year average of 4% for the time of year.
As well as meteorological conditions, US farmers are encouraged to plant more soya beans by the distortions of federal subsidies.
The Loan Deficiency Payment programme introduced with the Freedom to Farm Act effectively cushions soya bean farmers at an average rate of $5.26/bushel, well above current market values.
Meanwhile in the southern hemisphere, the soya bean harvest is almost complete and the US faces fierce export competition.
Already 90% is gathered in Brazil, while flood damage to the Argentinean oilseed crop appears to be limited.