It’s the year-end holidays in the freezing Midwest and months away before this field or any other in the U.S. Midwest will be seeded. But now is the time farmers begin thinking about booking their seed and fertilizer for next spring — though they as a rule won’t pull the trigger on deals before January, the new tax year.
    The relationship between corn and soybean prices will be key to their decisions. The grain market knows this. So this guesswork may have a hand in shifting Chicago Board of Trade grain prices in coming weeks and through the winter.
    In fact, this guesswork is already hitting the floor.
    By the first week of December, CBOT corn prices had dipped to levels that were definitely deterring farmers from seeding corn next spring. The ratio between new-crop November soybeans <SX9> and December corn <CZ9> — the 2009 harvest hedge months — hit a point (2.28 to 1) that attracted spreaders to begin buying corn and selling soybeans.
    Since then, corn has continued to gain back ground against beans, with the latest push starting on Friday after analytical Informa Economics shocked grain traders with updated 2009 corn and soybean planting numbers.
    The widely watched consultant said that, based on a farmer survey it conducted in early December, U.S. corn seedings will drop to 82.3 million acres, down 4 percent from the 85.9 million seeded last spring. U.S. soy acres were pegged at 81.5 million, up more than 7 percent from 75.9 million last spring.
    Falling corn prices since the summer, as ethanol demand deflates, is just one factor. The high cost of planting corn, where yields are directly related to high-priced fertilizer applications, was also enticing the switch to soybeans. Soy, a legume, fixes nitrogen in its roots and costs less to plant.
    Soybean prices have also slipped since the summer as the global economic panic deflated all commodity prices. But the fall has been less severe than corn, underpinned by tight U.S. stockpiles and continuing strong Chinese demand for soy.
    Since early September, new-crop Chicago Board of Trade December corn 2009 futures slipped on Dec. 5 to a season low of $3.49-1/4 a bushel from about $6.15, or 43 percent.
    New-crop November 2009 soybean futures <SX9> have fallen 38 percent — to $7.96-1/2 last Friday from near $13 on Sept. 2.
    But on Monday morning corn was on a roll again, gaining on soybeans as traders took profits on earlier seeding bets. The soy/corn price ratio narrowed back to 2.05 to 1 in early going. That ratio is sure to stay in the spotlight. 
     
PHOTO: Corn field in northern Illinois near Woodstock taken Sunday, Dec. 14 by Christine Stebbins