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2007 soybean outlook bright despite growing corn demand

Agriculture.com Staff 02/12/2007 @ 8:08am

All market indicators point toward a significant increase in corn acreage in 2007, a result of the rapid growth of the corn market's ethanol sector, says a recent report from Syngenta.

Estimates from market analysts are that U.S. farmers will need to grow about 9 million to 12 million more acres of corn to meet increasing demand. The main source of the additional corn acreage is expected to come from soybean acres.

However, before growers make the decision to plant acres and acres of continuous corn, they should consider that soybean demand is expected to increase next year too. Though the increase in soybean demand will not be as great as in corn, market opportunities certainly exist.

"The 2007 outlook for soybeans is very good," says Eric Niemann, chairman of the United Soybean Board (USB) and a Kansas grower. "We have a very good supply of soybeans, some 500 million bushels carryover. As we think about losing acres to corn, soybean farmers can be reassured we're going to have plenty of soybeans and they are still going to be a good value."

Andrew Cottrell, Northern Field Crops Manager for Syngenta, agrees. "The future for soybean pricing looks very good because demand is healthy in U.S. markets...demand for soybean feed, meal and oil," he says.

Agricultural marketing expert Bob Utterback of Utterback Marketing Services, Inc., says, the predominant issue will be how many soybean acres are planted this spring.

"Spring planting is going to have a dramatic impact," he says. "Do we have a great spring planting season and plant corn acres, or do we have a wet spring and plant more bean acres?"

Utterback cautions that there is "some price variability" due to the domestic soybean inventory, up 26% from last year according to the USDA. But, he says, "the opportunity for soybeans is going to become very significant."

So, what are the opportunities for soybean growers going forward?

"We know that in the bag you have a potential of 100 bushels per acre. Average soybean yield in the U.S. now is 40 bushels. So, there's a clear gap in yield potential," Cottrell says. "With new seed traits, seed treatment technologies and crop protection materials, there's a potential to drive that yield forward, closer to the biological potential of 100 bushels per acre."

All market indicators point toward a significant increase in corn acreage in 2007, a result of the rapid growth of the corn market's ethanol sector, says a recent report from Syngenta.

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