To complicate matters, increased production expenses, especially fertilizer, could very well favor the seeding of a crop that is less expensive to plant, such as soybeans, rather than corn.
Another consideration is that there are a variety of crops that are seeing their highest prices in years, such as wheat, milo, oats, and barley, among others, all of which are claiming their claim in the next “battle of the surface”.
This chart shows the average February price for November soybeans and December corn in $/bushel on the left axis versus the percentage of soybean acreage in corn, as indicated by the planting intentions numbers of the USDA march on the right axis.
The yellow boxes show the average SX/CZ ratio for the month of February.
We don’t yet know what the average price for corn and soybeans will be in February this year, but the current December 2022 corn price of $5.82 is the second highest on record after the average price of $6.01 $ observed in February 2011, while the current November 2022 price for soybeans at $14.13 if held would be the highest on record for the February calculation for new crop soybeans.
As shown in the graph, the numbers in the yellow boxes are the average soybean to corn ratios from February to November and the current ratio of 2.42 this year is above the average of 2.35 where bean plantings are favored over maize and when the ratio is lower than that. maize is considered the most attractive crop to plant.
The average SX/CZ ratio for February last year was 2.59, the highest on record and was one of the reasons the March 2021 USDA forward planting figure for soybeans was rather high of 96.1% of the 2021 corn intentions figure compared to the 2000-2021 average of 90.4%.
Other years of high SX/CZ ratios, such as consecutive years in 2017 and 2018, when the ratio was 2.57, resulted in planted area ratios of 99.4% and 101.1% respectively.
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