Soybean and wheat prices have reached lock limit down following the release of the USDA report showing that acreage committed to soybeans was significantly more than even previous estimates had expected. Wheat is trading near the lock limit price, but soybeans locked limit down almost the instant the market opened, with an ask pool of nearly 40,000 contracts at the time of this writing.
Soybeans
Wheat
Corn, on the other hand, is trading higher because the acreage being planned for soybeans will largely be taken from acreage that might have otherwise been committed to corn. There are only a fixed number of arable agricultural acres available for planting in the United States. Over the past two years, many farmers have increased acreage planted in corn, but to avoid the possibility of greater pests due to progressive planting of the same land in a single crop year after year, and to avoid the higher cost of fertilizer, many farmers are rotating out of corn this year and into soybeans instead. Corn is a fertilizer hog, requiring nitrogen in particular, and fertilizer is made from crude oil, the price of which has also skyrocketed this past year. Thus, it was almost a certainty that large amounts of acreage that have been planted in corn the past two years would be rotated to another crop this year. Furthermore, since soybeans are a legume and fix nitrogen into the soil, they were a natural and likely choice for farmers to choose instead of corn.
Corn
