Hello to All. In the following news says that when the Ratio Soybeans/Corn is above 2.4:1 is advanced to Soybeans and Ratio below 2.2:1 advanced Corn. https://www.thebalance.com/corn-vs-soybeans-808899 Trade it someone this spread ? Kind Regards, George Kanellopoulos.
Uhm... this is regarding what farmers think which of the two is better for them to farm... If the ratio for new crop futures is at 2.4 or higher... (soy over corn) then they prefer to sow and farm soybeans. I've traded ZS, ZC and ZW a bit in the past, did okay but nothing amazing. Just thinking out loud here....... In theory, I would say that the new crop soybean futures (ZS) would then start to fall relative to the corn futures (ZC).... since more soybeans will be produced. I wonder if that's actually the fact or not? I do see differences in the ratios. old crop ratio is about 2.7 (May futures) new crop ratio is about 2.45... (Nov for soybean, Dec for corn) The old crop ratio in May '17 (which was the new crop ratio then) was at 2.3... so I guess if everyone started to do new crops of corn... it made sense for that ratio to increase over the last 10 months, since there's more corn than soy coming up... so soybean prices rise relative to corn. Interesting.... So they would be about even on farming either one or the other now? Maybe a bit more Soybeans will go in? @bone, is this something you trade?
There is also other concerns for what to plant, existing crop rotation, fertilizer costs (beans take less), transportation and storage issues (beans = less bushels to move and store).