Bean bailout prospects turn futures red as planting switch feared

New farmer aid plans, leaked to Bloomberg on Tuesday, have caused Chicago soybean futures to tank, eroding gains made since Monday on concerns that wet weather would halt US planting progress. 

The July contract was at $8.29/bu at time of press, hitting a low of $8.19/bu, and down 10 c/bu from $8.39/bu at 1300 Eastern time. 

The White House is preparing an aid package worth $15 billion to assist farmers hit by the latest escalation in the US-China trade war, which could see farmers receiving up to $2/bu for every bushell of soybean planted, Bloomberg reported. 

Aid handouts for corn and wheat are expected to be less generous at 63 c/bu and 4 c/bu, respectively. 

Most market participants now expect farmers to switch corn acreage for soybeans. 

“If confirmed, $2/bu would be a huge incentive for those guys unable to get corn in the ground to plant soybeans,” Kelly Herrick, analyst at Advance Trading Inc said.

“We had rallied corn enough that it was making the prevented plantings decision a little tougher. This throws another variable into the mix,” he said.