“The weather won’t scare guys off.”
– dennis lange, parent seeds
Volat i le markets and a near crop disaster last fall are unlikely to dampen Manitoba farmers’ enthusiasm for soybeans this year.
Manitoba’s 2010 soybean acreage could be similar to the record area planted in 2009, industry officials predict.
Soybean growers barely managed to pull off the harvest last year after a cool, damp summer and a late fall pushed combining into late October and even November.
But producers still managed to harvest 400,000 of the 415,000 acres planted, according to Statistics Canada.
A lot of the crop came off wet. A lack of heat in August also created some problems with white mould, said Dennis Lange, an agronomist with Parent Seed Farms.
But yields were generally satisfactory, averaging 30 bushels or more an acre.
Last year’s close shave with the weather isn’t likely to deter plantings this spring, said Lange.
“The weather won’t scare guys off.”
Manitoba’s soybean acreage has skyrocketed since 2001 when only 50,000 acres were planted. Originally grown in the Red River Valley, soybeans are now found as far afield as Beausejour in the east and Dauphin in the northwest.
The introduction of earlier-maturing varieties suited to Manitoba growing conditions propelled the increase. Recent price spikes also encouraged farmers to expand soybean acreages.
But soybean prices are notoriously volatile, depending on suppl ies. Soybean markets right now are undergoing a major transition with tight stocks suddenly giving way to surpluses, said Jonathon Driedger, an analyst with FarmLink Marketing Solutions.
Driedger told producers during last week’s annual Manitoba Special Crops Symposium world soybean stocks were tight in the first part of 2009 until a record U. S. crop sent prices tumbling.
BIG SOUTH AMERICAN CROP
Futures prices peaked in early 2009, plummeted in October, recovered in December and have fallen again since January.
A “massive” soybean crop expected for South America this spring could be further bearish for prices, said Driedger.
But continued strong
demand for both soybeans and vegetable oil could provide “potential bullish surprises” for markets, he said in his presentation.
Later, Driedger said markets may be rebounding after bottoming out in early February. New crop spot prices are currently hovering around $8.25 to $8.50 a bushel.
“I don’t think (the market is) completely going to fall out of bed,” he said.
Driedger advised growers to use price rallies to lock in sales but not to wait too long for prices to go higher. Nine dollars a bushel is seen as a good return these days.
Driedger hesitated to say producers should take what they can get now. But he added, “I’d be reluctant to chase down the market.”
At the same time, he recommended producers exercise patience and not engage in panic selling during price dips.
Mark Jorgensen, a grain merchandiser with Delmar Commodities, said soybean markets are notoriously volatile and can easily go down the daily limit of 70 cents a bushel, only to recover shortly after.
He recommended growers target sales by pre-selling no more than 25 per cent of their production at a time because of unpredictable price swings.
China, the world’s largest soybean importer, could strongly influence markets in 2010, analysts say.
Driedger and Jorgensen both speculated China could create upheaval if it retaliates against U. S. trade action on other fronts by reneging on soybean purchases.
“They are the wild card. We don’t know what they’re going to do,” said Jorgensen. [email protected]