Traders believe U.S. farmers are stampeding into soybeans this year and are looking for confirmation at USDA’s two-day Agricultural Outlook Forum, which opens this morning with speeches by President Trump’s nominee for U.S. ambassador to China and the House Agriculture chairman, Michael Conaway of Texas. This is the first time since 1995 that the secretary of agriculture will not speak at the forum.
The reason this time is the same as 22 years ago — there’s a vacancy. Former Georgia Gov. Sonny Perdue is Trump’s choice to succeed Tom Vilsack, who left USDA in January, but he’s still going through a background check. In 1995, the forum was held in the interval between the resignation of Mike Espy and the Senate confirmation of Dan Glickman.
Iowa Gov. Terry Branstad, the nominee for ambassador to China, is listed as the distinguished speaker of the morning. It’s rare for presidential nominees to speak in public while awaiting confirmation. Conaway, who sees hard times in farm country due to low commodity prices, is the keynote speaker. USDA chief economist Robert Johansson will set the stage with a description of the agricultural and farm trade outlook, likely to include some tidbits of USDA’s latest thinking on this year’s crops.
Some 1,600 people are expected to attend the forum, held in suburban Arlington, Va. The forum is an extravaganza of speakers and topics, but for commodity traders, the most important issue is USDA’s projections of crop plantings, harvest, usage and prices, which will be based on current weather and market conditions and assume normal weather and yields in the months ahead.
These are “the first official forecasts” — USDA shies away from that word — “that really count,” says Agrimoney, “which in turn have a big say in the outlook for prices worldwide.” Wheat futures prices rose and soybean prices fell on Wednesday as markets readied for the USDA data, said Agrimoney.
Surveys by Reuters and Bloomberg showed traders expect soybean plantings of 87.6-88.3 million acres, far ahead of the record 83.4 million acres planted last year. It also would top the USDA projection of 85.5 million acres, released last November. The result would be the second-largest soybean crop on record.
The wire services said traders expect corn plantings to be as much as 1 million acres larger than USDA’s November projection of 90 million acres. Even so, it would be less than the 94 million acres of corn in 2016. Soybeans offer more profit at this point than corn. To make room for soybeans, traders say growers will plant less wheat than USDA projected in November as well as throttle back on corn. In January, USDA said plantings of winter wheat, the dominant U.S. variety, were the smallest they had been since 1909 and 10 percent smaller than 2016.