“So we’ve seen a shift, with China now importing beans to keep its infrastructure going. China will continue to be the big driver in terms of global soybean demand. The U.S. is projected to get some export growth, but the major growth is expected to come from Brazil, our major competitor.”

Soybean prices have followed a “sideways” pattern since this past November, says Smith, but remain very good.

 

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“Considering what futures prices have done over the past four to five years, the basis is real tight, indicating a need for soybeans. We’ll probably stay in this sideways trend until we see what production numbers actually are from Brazil and Argentina.”

A large part of the U.S. remains in a drought, including parts of Georgia, says Smith, and the outlook is for continued dry conditions in the Southern Plains.

“Generally, with a drought such as we’ve seen in the Midwest this past year, we don’t see a total recovery in the next year. Right now, we see a projection for a persistent drought in the Midwest.

“The Corn Belt could be split this year in terms of moisture, with a disparity in the region itself if this drought continues. We still could be below trend-line yields, but I look for us to improve by a bushel or two over last year.”

Looking at cost and return comparisons, soybeans and corn are showing the highest returns over variable costs, compared to cotton and peanuts, says Smith. This would indicate a shift more of those crops this year, with cotton dropping slightly.

“Right now, we have a relatively tight supply, with China’s demand continuing to increase. Could we see an acreage battle with corn?

“In Georgia, I think we’ll push up to more than 400,000 acres in soybeans. I’m basing that on 2009, when were in a similar situation, with a large peanut crop and a recovery in corn and soybean prices.”

Winter seedings of wheat in Georgia are pegged at 410,000 acres, says Smith. “That would suggest we would at least bump up soybean acreage on double-cropping as well as on double-cropped cotton.

“In Florida, winter wheat seedings are at 20,000 acres. We’re not real short on wheat, but we’re short enough to have some price volatility this year.”

phollis@farmpress.com

 

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