by Agrimoney.com
Corn may make a fightback in the battle of the acres against soybeans in South America, as high prices – which have risen above even Chicago levels – encourage farmers to rethink the "soy surge".
Soybeans have been on a winning streak in South America for decades, overtaking corn for sown area in Argentina in the 1980s and now accounting for five times as much land, driving the country to third place among exporters of the oilseeds.
In Brazil, the region's top grower of both crops, soybeans took the lead 14 years ago, and now take up roughly twice the area.
Brazil-based crop consultant Kory Melby said that this "soy surge", which has encompassed 1.9m hectares nationally over the last three years, was "related to cost of production and risk management strategies".
Soybeans vs corn and wheat
However, Mr Melby also noted that "corn prices domestically are very strong", trading at a premium to Chicago futures, with the Brazilian market lifted by a disappointing safrinha crop, besides srong international values.
Oil World, the analysis group, said that the "sharp" increase in prices was likely to spur extra sowings of the grain in southern and central areas, "as farmers are responding to the improved profitability of corn production".
Indeed, in South America as a whole "further growth of soybean plantings in 2011-12 will be threatened by increased competition from corn and wheat", the group said.
China factor
In Argentina, sowings faced a longer-term impetus too, assuming talks with Beijing over opening corn exports to China bear fruit.
"It is expected that Argentina will benefit considerably from rising Chinese corn import requirements in the years ahead," Oil World said.
"This is likely to improve the attractiveness of corn growing and thus implies increased acreage competition for soybeans in Argentina."
Fight for dirt
The prospect of an intense so-called "battle for acres" between the grain and the oilseed echoes that witnessed in North America earlier in the year – a fight won by corn, despite a poor early spring seeding period.
US corn sowings are currently estimated up 4.1m acres year on year to their second-highest since World War II, in part at the expense of soybean, whose plantings are believed to have dropped by 2.2m acres.
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