Multiyear highs in US corn and soyabean prices this week sparked farmers to sell new- and old-crop corn but they remain hesitant to price many beans, waiting for even higher prices, grain industry sources said.
Concerns about shrinking domestic soybean supplies and weather damage to the South American soyabean crop pushed soyabean futures to 15-1/2 year highs on Wednesday. But many US farmers have still been hesitant to capitalise on old-crop prices as high as $9.50 for soybeans.
"For the most part selling has been real light. That's one of the reasons the market has been able to accelerate so fast," said Dan Zwicker, grain analyst with Agrivisor Services Inc.
The US Agriculture Department in February projected that US soyabean end-season stocks next August 31 will fall to 125 million bushels, the lowest in 27 years.
This week's talk of crop damage in Brazil and Argentina fed concerns that US stocks might fall even further if, for example, China needs to buy more US soybeans than earlier expected.
Talk that the US may block South American soy or soyabean imports to keep out soy rust has made both speculators and farmers even more bullish.
"Farmers have probably sold what they're going to sell, and they're going to let the market run to where it's going to run," said Zwicker, who advises farmers on marketing plans.
The depleted US 2003 soy crop - down 12 percent from 2002 due to drought losses - has also left many farmers with little remaining from the fall harvest. US December 1 soya stocks were 1.69 billion bushels, down 20 percent from a year earlier, with on-farm stocks at 820 million, down 30 percent.
There was some interest in new-crop soyabean sales as cash flat prices approached $7.15 early this week. But dealers said some farmers were delaying the pricing of new-crop contracts after getting burned by surprise harvest rallies last year.
Many saw forward contracts booked in February 2003 as a loss after the market rallied more than $1.50 higher by harvest time. As a result, more farmers may wait until later this year for new-crop sales, regardless of the current historic highs.
"We could probably go up another 50 cents on new-crop beans and I'm not real sure that we're going to buy a whole lot more beans. It's almost a function of the calendar - timing more so than price," said Greg Johnson, a grain merchandiser with The Andersons in Champaign, Illinois.
By contrast, corn sales have been steady at many Midwest terminals as corn futures have tracked soyabean up, with 6-1/2-year highs hit this week. Old-crop sales have been consistent with the board run-up, and new-crop corn interest picked up this week as fall prices approached $3.00.
"It started to pick back up again after we got into the $2.90s," Johnson said. "They'd like to have $3, but they realised everyone would like to have $3."
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