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Corn+Soybean Digest

Thiesse's Thoughts

The price for soybean futures on the Chicago Board of Trade (CBOT) has risen over $1/bu. from early February to early March, and was over $6/bu. on March 7. The rapid price increase has been largely driven by a dry weather pattern in South America that is likely to reduce soybean yields in parts Brazil and other South American countries. This has caused market analysts to lower the overall estimated 2005 soybean production in Brazil. Since we are in a world soybean market, this dry weather pattern in Brazil has had a positive effect on soybean market prices on the CBOT and at local grain elevators. The cash soybean price at Lake Crystal, Minnesota opened at $5.76/bu. on March 7, which compares to a cash soybean price of $4.95/bu. on February 8.

Many farm operators still have a considerable amount of 2004 soybeans in storage. Back in January, many of these producers were kicking themselves that they didn’t take advantage of pricing opportunities above $6/bushel for the 2004 soybean crop that existed until mid-September 2004. In January, they were also hoping to get an extra quarter or so per bushel more for the soybeans in storage, before they sold the beans. Now the market has offered those producers an extra $0.70-$0.80/bu. compared to January, and many farmers are getting more bullish on soybean prices, and are not willing to sell any more beans. Be careful … once this South American weather scare is over, soybean prices could drop off again. Problems with the U.S. soybean crop due to aphids, soybean rust, etc. are likely to come later in the growing season. This will likely have a bigger impact on the new crop 2005 soybean prices than current cash prices. Is it worth passing up the best soybean prices on 2004 soybeans since early September last year, and store the beans for several more months, with the hope that weather, aphids, soybean rust, or some other calamity will cause the cash soybean price to rise sharply later this year?

March 15 is the deadline to purchase crop insurance for the 2005 crop year in Minnesota.
Be sure to compare the standard APH (yield only) policies with the Revenue Assurance (RA or CRC) type policies that offer a revenue guarantee that is based off of yield and price. Even though the base prices and the base guarantees with RA and CRC policies for corn and soybeans are much lower in 2004, remember that revenue guarantees do increase with CRC and RA-HP policies by harvest if average prices are higher at harvest time. Producers may also want to consider the GRIP insurance, which insures all acres of a given crop with revenue coverage, but at a lower premium than RA or CRC insurance. Contact your Crop Insurance Agent to analyze your crop insurance needs and alternatives to determine the most cost-effective crop insurance strategy for your farm operation.

The U of M Extension Service in Blue Earth and Le Sueur Counties is offering a course titled “Soils 101 Short Course” on Tuesday, March 15, from 9:00 AM to 4:00 PM, at the Nichols Office Building in Mankato. The course will be taught by U of M Extension Educators, and will focus on all aspects of soil fertility including N-, P-, & K-micronutrients, organic matter, compaction, and the latest trends in crop fertilization. The registration fee is $60/person, which includes the noon lunch and all program materials. For more information, contact the Blue Earth County Extension Office (507-389-8325).

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