Soybean prices fell to a six-week low under $10.10 per bushel on Friday, dragged lower by USDA projections for a bean crop of 4.18 billion bushels this year, a harvest that would be the second-largest in history if it comes to fruition. Farmers are expected to plant a record 88 million acres of soybeans this year, choosing beans instead of less profitable crops like corn and wheat.
Other USDA expectations are predicting sharply smaller wheat and corn crops this year, but show that stockpiles of all three major agricultural commodities should remain ample, a factor that should keep a lid on prices.
For those farmers who have already invested money in seed, chemicals, equipment, and land, it is important that they protect their crop values as well. They typically begin this process before planting, either by forward selling, purchasing insurance, or using the futures and options markets to lock in prices.