The relationship between expected fall harvest prices indicates Midwest farmers would make more money planting soybeans this year rather than corn, according to University of Illinois professor Gary Schnitkey.
During the first half of February, new-crop soybean futures averaged $13.01 a bushel and new-crop corn averaged $5.73 a bushel, a ratio of 2.27, Schnitkey wrote earlier this week on the farmdocDaily agricultural news site. That's higher than the 2.22 average for 2007-2012 for the soybean-to-corn ratio, a long-running market gauge of farmer planting intentions.
Based on the recent ratio, 2013 prices "slightly favor soybean production," Schnitkey said. "Higher soybean-to-corn price ratios tend to indicate that soybeans are more profitable to plant than corn, and vice versa." Still, while large corn plantings are expected this spring, "it will remain to be seen" if that actually happens.
"These projected prices will have large impacts on risks farmers face during 2013," Schnitkey added. On February 20, CME Group November soybean futures and December corn futures settled at $12.87 and $5.61 ½, respectively, for a ratio of 2.29.