Soybean prices may decline as U.S. farmers boost planting this year, while rains in South America may improve prospects for crops that have suffered from dry weather, said Steve Georgy, a broker manager at Allendale Inc.
U.S. farmers may plant about 76.008 million acres in soybeans this year, up from 74.976 million last year, Georgy said at Allendale’s annual outlook conference in Crystal Lake, Illinois. With average yields, that may leave U.S. production at 3.299 billion bushels, he said.
Areas of Argentina may get as much as 2.5 inches (6.4 centimeters) of rain by Jan. 23, while storms next week may bring as much as 1 inch to parts of Brazil, forecaster Telvent DTN said yesterday in a report.
“With an increase in South America, and if we’re looking at an increase as well, things could go downhill,” Georgy said. “These rains that are coming in are extremely important right now for Brazil, Argentina and South America as a whole. We could still see a very good crop from South America.”
Soybean futures at $10.20 a bushel may represent a fair-value price, he said. March soybeans closed at $11.87 a bushel yesterday on the Chicago Board of Trade, up 5.9 percent since mid-December as concern mounted that dry weather would cut yields on South American crops.