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The global credit crisis and lower profitability could affect the planting season in the southern hemisphere this year.

In the southern hemisphere, the planting season is approaching. This is a particularly capital-intensive period in the crop cycle and usually requires farmers to rely on financing to obtain the necessities, such as fertilizer and seed. But reduced profitability and the global credit crisis threaten to reduce planting this season.

Grain prices remain near the lows set in October as the global financial crisis and simultaneous recessions in major economies continue to sap demand. Additional pressure due to commodity speculators moving from buying to selling has more or less ensured stagnation at relatively depressed prices.

Wheat currently trades for about $5.25 per bushel, a drop of about 55 percent from its March highs of around $11.60 per bushel. Soybeans are trading for about $9.05 per bushel, down about 45 percent from a high of $16.60 per bushel in June. The price of corn has been halved to $3.75 per bushel, from about $7.55 per bushel in June. Rice enjoyed a brief rally to near $16.00 per hundredweight (cwt) in the first days of November, but it has since fallen to around $14.60 per cwt, down about 39 percent from its April high of $23.80 per cwt.