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What’s HOT
As we shut the door on (a brutal) January, and turn the calendar to February - new crop futures will soon come into focus, followed by USDA’s first stab at new crop acres - which is only eight short weeks away.
To call this a HOT topic would be a massive understatement!
I touched on it a bit a few days ago, using the chart below with Nov beans and Dec corn scaled at a 2.45 ratio.
I am very adamant about NOT getting lost in all the ratio talk, but I am a huge proponent of looking at things from another angle - and that is just what the chart(s) below do.
As it stands today, soybeans look to be overvalued versus corn… or perhaps corn is undervalued versus beans.
Either way - soybeans continue to hold their own (in spite of new lows for the move), leaving many to wonder how the acreage battle shakes out this spring.
Again - another way to look at February new crop futures performance and USDA’s initial acreage estimates, reported in March’s Prospective Plantings.
Years where soybeans spent February trading at an advantage over corn (higher bean:corn ratio) generally coincide with soybeans claiming a larger percentage-share of the acreage pool in the March report.
Today’s 2.50 implies beans have an advantage over corn, but to what degree - only time will tell.
Looking on the bright side, corn exports are HOT, especially to top-buyer Mexico who has a record 602 million bushels of U.S. corn on the books for 2023/24 accounting for nearly half of current commitments.
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