Soybean Rally Gives U.S. Farmers Pause on Possible Shift to Corn
(Bloomberg) -- A soybean rally fueled by signs of easing U.S.-China trade tensions has added a wrinkle to the plans of some farmers to shift more acres to corn.
On Tuesday, soybean futures closed at a premium of $5.375 a bushel to corn, the highest since June 18. The oilseed defied a slump in equities partly spurred by renewed U.S.-China trade concerns in industries outside agriculture. U.S. President Donald Trump and Treasury Secretary Steven Mnuchin signaled China will resume soybean purchases soon. Prices had slumped after the Asian country began to shun U.S. supplies in July.
The soybean-corn spread “plays an integral role in planting decisions for farmers,” Mark Recker, who raises both crops in Fayette County, Iowa, said Tuesday in a telephone interview. “I can tell you that guys are looking really hard at growing more corn.”
Recker said he planted 700 acres of soybeans (283 hectares) and 800 acres of corn this year. As of Tuesday, he intended to shift to 900 acres of corn and 600 acres of soybeans next season. Now, he's waiting to see how the U.S.-China trade talks play out.
The spread rally “might continue as long as the trade believes we have a deal in China,” Ted Seifried, the chief market strategist at Zaner Group LLC in Chicago, said in a phone interview.
The Chinese government said Wednesday that it plans to move quickly on specific issues where a consensus was reached in trade talks over the weekend. Officials have been told to take the necessary steps for soybean purchases.
China is the world's top soybean consumer, and the U.S. and Brazil are the top producers. The corn-soybean spread, based on the most-active futures contracts, closed at the 2018 low of $4.65 on Sept. 12. It reached the year's high of $6.8925 on March 5.
To contact the reporter on this story: Jeremy Hill in New York at jhill273@bloomberg.net
To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Patrick McKiernan
©2018 Bloomberg L.P.
-
High US Salaries, No Green Card Certainty: The Financial Calculation Facing Indian H-1B Families
The suspension of PERM processing at eight technology employers does not cancel existing H-1B visas. What it does is force a question many Indian families have been avoiding: is the US salary worth tying your career and family plans to one employer?
-
Swiggy vs Eternal: Food Delivery's Two Rivals Are No Longer In The Same Race
Eternal is building a private AI assistant, dark.ai. Swiggy is still working out how to make Instamart pay, with an operating loss of Rs 895 crore in the July-September quarter while Blinkit stayed profitable.
-
Where You Live Shapes How You Get To Work | The Reason Why
Two-wheelers are the most popular way to get to work in India, accounting for nearly 43% of workplace commutes.
-
Unhedged Position: Can India See An Indonesia-Style Time Correction?
The Nifty is trading below levels it first clocked in 2024. Is there, then, as I have suggested in the headline, potential that the current time correction drags on painfully for the next three-five, even ten years?
-
Navigating Friction And Energy Realities: An Analysis Of Marco Rubio's October Visit To India
Occurring at a critical juncture marked by stalled trade negotiations and escalating geopolitical pressures over global energy supplies, the visit offers a profound window into modern US-India relations.
-
India Exports Capital. Why Not Export Trusteeship?
The big question, then, is whether India can build an institution that global borrowers, investors, banks, and lawyers can trust, even without an Indian connection.
-
France's Economy & Politics Are In Crisis | The Reason Why
Let's look at how the French economy and politics evolved under Nicolas Sarkozy, Franois Hollande and Emmanuel Macron.
-
You May Inherit The Business. You Must Earn Its Credibility.
Succession tests the founder's ability to share authority as much as it tests the next generation's readiness to assume it.
-
Signing Deals Is One Thing; Making Them Work Is Another | The Week In Whys
Sometimes, things don't turn out as planned. Indian companies have lost some bids to rivals, some projects won't produce until 2030.
-
FOMC Wall, PERM Suspension, Hospital Stocks | Talking Points This Week
A PERM suspension would directly affect green-card sponsorship rather than H-1B visas, so the near-term earnings impact could remain relatively limited. The key question is whether this marks a new phase in US scrutiny of Indian IT.
