Soybean prices rally as P.E.I. farmers prepare to plant

Farmers on P.E.I. have been jumping to sign contracts for their soybean crops as bad news in Argentina causes a spike in prices.

Soybean prices up 20 per cent since the end of 2015

P.E.I. farmers are rushing to sign soybean contracts this week.

Farmers on P.E.I. have been jumping to sign contracts for their soybean crops as bad news in Argentina is causing a spike in prices.

The price rally started earlier this week, following reports that flooding in Argentina had destroyed 1.4 million hectares of soybeans. Argentina is the third largest soybean-producing nation, behind the U.S. and Brazil.

The bad news in Argentina means better prices for P.E.I. farmers.

"With so much uncertainty in farm markets, a little good news never hurts," said Neil Campbell, general manager of P.E.I. Grain Elevators in Kensington.

Guaranteed prices

Soybeans prices peaked at about $450 per metric tonne Tuesday and were trading at $435 at the end of Wednesday. That's about the same price as last spring, but well above the $360 soybeans were fetching in December.

Growers who signed contracts now have that price guaranteed for them at harvest time.

Campbell said his phone has been ringing steadily with farmers calling to inquire about prices and, in many cases, to sign contracts. 

"Farmers will be planting soybeans in the next couple of weeks or so.  Some farmers are planting more because of the price," said Campbell.

Price rally too late for some farmers

But Island farmers have more than just the price to think about when planting soybeans.

"It's not as easy as just throwing extra seed in the ground," said Mary Robinson, president of the Prince Edward Island Federation of Agriculture.

"Soybeans are often part of multi-year crop rotations.  It may be a little late in the season now, for some farmers, to make changes to their cropping plans.'

Some planting this spring - barley for example - has already begun.

Campbell estimates the Island's 180 farmers who grown soybeans will plant a little more than 20,000 hectares this year.

"If a farmer signed a contract this week, it was probably a good week to do it," said Campbell.