soybean article bloomberg

I found this article on Bloomberg- perhaps Agri may be rescued by falling feedstock prices, which will make the sale more attractive.

March 29, 2008 - 12:36PM

Soybeans tumbled more than 4%, and wheat fell on forecasts that US farmers will plant more this year to take advantage of surging prices. Corn rose as growers may seed less of the grain.

When seeding starts in May, growers will plant 12% more soybeans than a year ago, according to a Bloomberg survey of 24 analysts and traders before a government report on March 31. Spring-wheat acres may rise 6.2%, the survey showed. Soybeans have gained 64% in the past year, and wheat more than doubled.

''I'm expecting some liquidation pressure in soybeans and wheat before the report,'' said Dave Marshall, a farm-marketing adviser for Toay Commodity Futures Group LLC in Nashville, Illinois.

Soybean futures for May delivery plunged 60 cents, or 4.5%, to $US12.6725 a bushel on the Chicago Board of Trade. The price rose to a record $US15.8625 on March 3 as demand climbed, while US growers last year planted the fewest acres with the oilseed in more than a decade.

Futures climbed 5% this week after farmers in Argentina, the world's third-largest exporter, blocked roads to ports in a protest against an increase in export taxes.

Wheat futures for May delivery dropped 25 cents, or 2.5%, to $US9.89 a bushel. The price reached a record $US13.495 a bushel on Feb. 27 on forecasts that global inventories will dwindle to the lowest in 30 years. Futures were little changed this week.

About 71.7 million acres in the US will be planted with soybeans, up from 63.6 million last year, and 14.1 million acres will be seeded with spring wheat, analysts in the survey said.

Corn acres will fall 6.7% to make way for more soybeans and spring wheat, analysts said. Farmers will probably plant 87.3 million acres with the grain, down from 93.6 million last year, the most since 1944, traders said. Prices have climbed 44% in the past year, trailing soybeans and wheat.

Corn futures for May delivery rose 5 cents, or 0.9%, to $US5.605 a bushel. The price gained 10% this week. The most-active contract reached a record $US5.795 a bushel on March 11.

Goldman Sachs Group Inc. said in a report today that it expects corn acres to fall to 84.1 million, a 10% drop from last year, and soybean acres to rise to 71.3 million acres, a 12% jump.

''Just as last year a significant amount of land was rotated out of soybeans into corn, this year we expect a large amount of land will be given back to soybeans from corn,'' Goldman said.

Soybeans will rebound after plunging 11% last week, Goldman said.

''We expect that soybean inventory build will be minimal, despite the land increase and are bullish as the recent sell-off has led to undervaluation,'' Goldman said. ''We are also bullish on corn on the back of an expected large acreage reduction and the consequent inventory draws.''

Corn is the biggest US crop, valued at a record $US52.1 billion in 2007, followed by soybeans at $US26.8 billion, government data show. Wheat is the fourth-largest at $US13.7 billion behind hay.

Bloomberg