Fundamentally Speaking

Lot of discussion expected as to how much of an increase will be seen for 2021 U.S. corn and soybean planted acreage and which of the two will get the lions share given an urgent need to dramatically expand seedings of each.

Some of the considerations being pondered include the soybean/corn price ratio, right now at 2.58 for the SX2021/CZ2021 contract, is strongly in favor of soy whereas a review of net return per acre studies involving costs suggest corn may have the leg up.

Mother Nature will have something to say with ideas that a generally speedy 2020 Midwest harvest resulting in a lot of preparatory fall fieldwork being done and with subsoil moisture conditions far less saturated than seen the past two years may allow corn seedings to advance at a quicker than normal pace perhaps resulting in larger plantings than had been intended.

Perhaps another factor may be expected revenues based not only on price but yield and which crop has performed better relative to each other over the past number of years.

This graphic shows the five, 10 and 20-year average corn/soybean yield ratios for the top 15 producing states and the U.S. along with the 2020 ratio.

We were curious not only about how this year's ratio differed from past averages but also the trend of the averages.

Have corn yields risen relative to beans recently such that the five-year average corn/bean ratio is higher than the 10-year which is higher than the 20-year, or perhaps the reverse implying bean yields gaining in corn?

Weather will play a major part but in some states corn yields have come in better than bean yields and in other areas vice-versa.

The 2020 growing season had plenty of challenges but the final soybean yield at 50.2 bpa came in at trend or perhaps a little better than that while for the second year in a row the national corn yield at 172.0 bpa came in below trend.

The 2020 U.S. corn/soybean yield ratio at 3.43 was below the 5, 10 and 20-year ratios respectively at 3.48, 3.47 and 3.56 which in itself implies U.S. soybeans yields have been gaining on corn yields over time.

Not the case in ND where corn yields held up very well compared to their soybean yields this year and that has been the trend over the past 20 years.

Corn yields did well vs. soybeans also in MN and SD but not the case in NC and OH.

Expectations of how each crop will yield in adverse, normal and above average conditions would seem to be part of the calculus as to which one to seed.

(c) Copyright 2021 DTN, LLC. All rights reserved.