Canada Markets

In today's Fundamentally Speaking column, DTN Contributing Analyst Joel Karlin looks at the changing ratio between planted acres of corn to planted acres of soybeans for a number of U.S. producing States. In the United States, ratios generated based on these two crops are of particular interest to market watchers because they the two largest crops but they also compete with each other for dominance.

Of interest in Karlin's analysis is that expectations are soybean acres will exceed corn acres in the U.S. for only the second time in history in 2015. High input costs for corn and prospects for higher net returns for soybeans are behind this trend.

The attached chart shows the Canadian trend in the ratio of the average acres seeded to corn to the average acres seeded to soybeans over the past five-, 10- and 20-year periods along with the ratio for 2014. Unlike the U.S., the average corn acres have failed to show dominance over soybeans in each of the periods in question, given the rapid rise in soybean acres. From 1995 to 2014, corn acres in the country grew by 23.7% to 3.0777 million acres, while soybean acres grew by 172% to 5.5619 million acres.

Over time, the country's seeded corn acre-to-seeded soybean acre ratio has fallen from .97 in the 1995 to 2014 20-year period, to .85 in the 2005 to 2014 10-year period, to .76 in the 2010 to 2014 five-year period and is calculated at .55 for 2014.

Also of interest is the sharp drop in corn acres relative to soybean acres in 2014, as shown by the purple bar. The country's overall corn acres fell by 16.6% from 2013 to 2014, while soybean acres increased by 20.4%, according to Statistics Canada data.

Cliff Jamieson can be reached at cliff.jamieson@dtn.com

Follow Cliff Jamieson on Twitter @CliffJamieson

(ES)

© Copyright 2015 DTN/The Progressive Farmer. All rights reserved.