By Ian Berry

  Of DOW JONES NEWSWIRES


  CHICAGO (Dow Jones)--The Chicago Board of Trade soybean-corn price ratio is
up at historical highs, and although analysts expect it will eventually return
to normal levels, they differ on whether that's bound to happen any time soon.

  While the soybean-corn ratio historically trades around 2.25-to-1 to
2.5-to-1, as of Tuesday's close the ratio for both old and new crop was well
above 3-to-1.

  "By historical standards that's extreme," said Vic Lespinasse, analyst for
grainanalyst.com. "You've got to get that back in line."

  However, with soybean fundamentals remaining bullish and corn fundamentals
widely seen as bearish, a significant correction in the spread seems unlikely
to many analysts in the near term. Those fundamentals were underscored again
Wednesday, when the U.S. Department of Agriculture projected near-record corn
yields while cutting its expected soybean output.

  Weather is more of a concern for the soybean crop than the corn crop,
analysts said, which accounts for part of the difference in sentiment. Soybeans
are also being driven by strong demand and tight near-term supplies, they said.

  "We just bottom-line do not have the beans going from old crop into new
crop," said David Smoldt, vice president of operations for FCStone.

  The ratio is widest for old crop, which is prompting the new-crop spread to
also widen in order to keep up, Smoldt said. As of Tuesday, the spread between
old-crop September corn and August soybeans, which expire Friday, was
3.697-to-1. "You'd have to go back to 1977 to have a higher ratio."

  Smoldt said he could see the ratio as high as 4-to-1, past the record of
3.96-to-1. The September soybean-September corn ratio is smaller at 3.335-to-1,
but should remain volatile and will climb if the soybean market remains
bullish, he said.

  Two different situations are developing, Smoldt said, and many analysts are
more closely following the new-crop November soybean-December corn ratio, which
was 3.128-to-1 Tuesday.

  Rich Feltes, senior vice president and director of research for MF Global,
said that ratio would continue to grow based on Wednesday's USDA reports.

  A floor trader, who is bearish corn, also sees no reason why the ratio won't
increase, as soybean traders remain antsy about the crop and maintain a weather
premium.

  "If the corn yield continues to go up, and acreage doesn't drop, then corn
will be relegated to the back seat," the trader said.


  Signs Of Correction


  Some analysts have noted that "out-of-whack" soybean-corn ratio as a factor
in this week's price action. On Monday, corn climbed even as soybeans fell
sharply, and on Wednesday, corn climbed following a bearish report while
soybeans were weaker on what was seen as a bullish report.

  Historically, whenever the ratio has bumped against its historic highs it has
not stayed that way for long, said Mike Zuzolo, president of Global Commodity
Analytics and Consulting.

  Still, he said that if the weather stays dry, "the beans are likely to hold
onto their premium versus corn."

  Smoldt sees the new-crop ratio coming back closer to normal levels by late
September or early October. By February, the ratio will "probably start to come
along even more," he said.

  The ratio is generally watched most closely in late winter and early spring,
leading into planting season, as farmers look at prices as they mull what crop
to plant.

  For now, said John Kleist, broker/analyst with Allendale, the ratio can stay
wide, and trading based on expectations the spread will narrow "is a bad play.

  "We don't have to screw with it," he said. "We did all the plantings we need,
so what the hell's the difference?"