Originally published November 15 2005
Soybean market draws more farmers into planting
by Mike Adams, the Health Ranger, NaturalNews Editor
With the recent rise in demand for biodiesel, the market for soybeans is at an all-time high, and many farmers are stopping wheat and corn production to join the trend.
The U.S. soybean harvest is not yet complete, and already analysts are considering the size of next year's soybean crop.
With record high diesel, fuel and fertilizer costs, farmers may decide soybeans are cheaper to produce.
"These high prices scare a lot of us, and wheat growers are not excited about growing wheat, but they are looking at growing more soybeans," said Ron McDaniel, Abbott Futures, Minneapolis.
A second reason for more soybeans - biodiesel is garnering so much attention, and production is expanding around the world.
"A lot of talk this winter is going to be about the cheaper cost to grow soybeans, and you're going back to what the government program affords," said McDaniel.
He said that he would consider hedging next year's soybeans at $5.97 (November 2006) on the Board, which is well above the loan rate.
Compared with late September prices, those prices were 10 cents lower for Nov. 2005, but only 2 cents lower for November 2006.
At one elevator in west central Minnesota, cash soybeans on Oct. 7 were $5.04 with a basis of 60 cents under.
McDaniel forecast that USDA's Oct. 12 report would indicate a 3 billion bushel plus U.S. 2005 soybean crop.
The Sept. 12 report estimated the nation's soybean crop at 2.856 billion bushels.
He expects the Aug. 31, 2006 soybean carryout will grow from a projected 165 million bushels up to 320-400 million bushels.
"We have a burdensome carryout projection that would not be too bullish to price," said McDaniel.
"Argentina is going to be increasing soybean acres and cutting back on corn," said McDaniel.
"We may get a forced flush of soybeans into the market - the crop is too big here, and our transportation network is still not functioning right," said McDaniel.
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