Both corn and soybean plantings are running ahead of schedule. That would set expectations for large increases in acreage for both above the prospective planting figures.
Early season challenges however include widespread drought in the Northern Plains and extreme dryness in large chunks of the NW Corn Belt have limited germination. Also limiting germination are cold temperatures with lows in the mid to low 20's seen this week.
This makes one question just how much a jump we will see. At this point it looks like corn has the upper hand for getting more area, leaving beans with the short end of the stick.
Pointing to this direction, we note that the move in the November soybean/December corn ratio from 2.63 on April 1 to 2.26 on May 6th is the largest decline in this ratio perhaps ever during this time span. It really brings into question as to how much can 2021 U.S. soybean planted area expand above the shockingly low 3/31 intentions figure of 87.6 million.
This graphic shows the change in the November soybean/December corn ratio from April 1 to May 6 for the past 25 years on the right axis. On the left axis is the change in U.S. corn and soybean planted area in 1000 acres from the March 31 Prospective Plantings to the June 30 Acreage Report.
A look back at SX/CZ ratio action for this time period over the past 25 years shows that the second largest ratio decline of -0.19 as opposed to this year's -0.37 was in 2011. In 2011 the soybean area fell 1.401 million acres between the 3/31 intentions and June acreage report.
The third largest decline was 2019 of -0.17 when the soybean area fell a massive 4.577 million acres between the two reports. Of note the 4/1/2007 to 5/6/2007 drop of -0.12 in the SX2007/CZ ratio resulted in a soybean area fall of 3.059 million acres.
Could we see the same thing this year? The fact is, over the past month, the SX/CZ ratio went from the highest ever as of the beginning of April at 2.63, a level that would ostensibly work in favor of more soybeans seeded as opposed to corn to now a ratio that is well under the long considered break-even point of 2.35 that has corn the favored crop to plant under this new scenario.
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