A report from the Department of Agriculture suggests soybeans are increasing in profitability over corn. The soybean-to-corn price ratio is often used as one of several tools in measuring the profitability of soybeans and corn.
The current ratio of U.S. soybean to corn prices has recently risen, sending a signal to farmers that the relative profitability of soybeans has increased over corn, according to USDA’s Economic Research Service. The ratio, which averaged 2.51 over the past 20 years, can tell farmers whether planting, harvesting, and storing one or the other crop might be advantageous.
When the USDA June 2020 Acreage report indicated that less corn acreage had been planted than expected in early spring, futures prices for corn in marketing year 2020/21 increased by eight percent. Soybean futures prices increased at the same time. Since late June, expectations of higher corn yields eroded the futures price for corn by 2.4 percent, while the price for soybeans increased by 1.1 percent.
This differential in prices led to an increase in the soybean-to-corn price ratio from 2.64 to 2.71, a 2.5 percent increase from late June.