b'SOYBEANS DRIVE DEMANDIN 2024 AS MARGINS TIGHTENGrowers shift as commodity prices fall faster than inputs.Peter MithamCONDITIONS ARE LARGELYimproving for grain andmoving product to market at low prices. Meanwhile, fertilizer oilseed producers as 2023 ends, but input costs continue tocosts have also come down, with ammonia prices down about dog growers who have seen commodity prices come off their50% and potash off about 44%.2022 highs. While the declines benefit growers at large, the 25% decline Overall intended plantings in 2023 stood at 318 millionin corn prices as soybean prices have held stable mean soybean acres, according to U.S. Department of Agriculture, Nationalfarmers are better positioned to take advantage of the savings.Agricultural Statistics Service, led by corn at approximately 92And then theres seed. While corn seed is on track to be up as million acres followed by soybeans at 87.5 million acres. But amuch as 5%, soybean prices are stable or falling as high stocks shift is underway as margins tighten on corn thanks to marketand a competitive market keep prices low.pricing that has fallen faster than input costs. Two of the major suppliers, Bayer and Corteva, are locked in The relative fall in commodity prices is more severe than thea fight for market share that has led Bayer to reduce prices on relative fall of inputs, says Sam Taylor, a New York-based analystsome of its seed. Bayer declined comment on the outlook for the specializing in farm inputs with the research division of inter- seed market, but industry sources indicate that it has lost con-national agricultural lender Rabobank. Its soybeans that looktracts for upwards of 2 million acres, making it keen to recover really favorable from a cost-return structure relative to last year. ground. Rabobank estimates U.S. growers will plant upwards of 6 mil- Taylor says the downward pressure on prices is similar to 2018 lion additional acres of soybeans in 2024 due to better marginswhen companies began releasing seed with Dicamba-tolerant once all inputs from land to crop protection tools are tallied. traits.The signs are there in the latest USDA crop bulletins. CornYou saw a fight for market share keeping prices really keen, producers harvested just 87.1 million acres this fall but yields wereand weve got that market dynamic playing out at the moment, up 10%. Pricing was off about 25%, averaging $4.94 a bushel thisTaylor says. They want to fight for market share, so theyre fight-season, down from $6.54 a bushel a year ago. ing on pricing.Prices for soybeans were stable, by contrast, averagingWithout those pressures, the anticipated increase in soybean $12.90 a bushel despite lower global production and higheracres would mean higher prices, but growers have dodged that demand. While the price should have increased, high domesticbullet for now.stocks offset other pressures. Nevertheless, all growers are paying close attention to their The importance of soybeans as a source of oil for both foodmargins. High land costs are affecting corn growers in particu-and biofuel promises to ensure their ongoing favor with produc- lar. Many older growers are opting to hold onto their properties, ers, supported by smaller canola crops in North America andleasing them out instead of selling, to generate ongoing income the ongoing effects of Russias war against Ukraine that hasfor retirement. This has insulated growers from interest rate tightened the outlook for vegetable oil. (Ukraine together withincreases on land purchases, but also forced them to fork out the Black Sea region generally accounts for more than half ofmoney on rent.the worlds sunflower oil output and more than three-quarters ofIt looks pretty crappy on the corn side, but if youre well sunflower oil exports.) capitalized, you own the land, dont have a high cost structure for The commodity price itself [isnt] falling off as a result of thisthe land, you can still eke out a decent profit, Taylor says.anticipated deficit longer-term on [vegetable] oil as well as theOther farmers are checking their access to debt, making sure biofuels mandate, he says. [Its] just going to be an incentive tolines of credit are available with lenders like Rabobank or investi-plant soybeans. gating vendor financing with suppliers. Very few are scaling back.Boosting the appeal of soybeans is the lower cost of inputs. There needs to be a material change in margins for them to Its a materially improved cost structure relative to 21 or 22,get out of those rotations, Taylor says of farmers in the Midwest. in my view, Taylor says. Growers are probably going to be still very keen to invest in Distributors who stocked on crop protection chemistriesinputs, maybe just in slightly a more judicious way, with a little bit in 2021 as delivery timelines lengthened are now destocking,more of a keen eye.112/ SEEDWORLD.COMDECEMBER 2023'