WASHINGTON — The U.S. Department of Agriculture's planting intentions report, issued two weeks ago, indicates that U.S. farmers intend to plant 8% less corn this year and will replace that acreage with soybeans and, to a lesser extent, wheat. Those estimates may have been cause for alarm among meat, poultry and egg suppliers, who have watched animal feed costs soar in recent years as demand from ethanol producers continues to force the price of corn to new heights.
However, the soybean futures market was in a tailspin in March — falling more than 20 percent during the month — as the report was being compiled and published. As a result, many farmers may have changed their plans and shifted production, according to an Associated Press report.
This sudden, steep drop in soybean futures prior to planting season is another indication that the commodities markets — including markets for corn, wheat and soybean futures — are being driven to record highs partly due to non-commercial speculation, as traders bet on food exports rising when the U.S. dollar falls relative to other currencies.
The Commodity Futures Trading Commission has said that it will meet later this month with traders and farmers to assess what is causing this turbulence in the markets, and whether price limits should be raised for trading food commodities.