If they take their cues from recent changes in the futures markets, U.S. farmers will plant slightly more soybeans and correspondingly less corn, says the think tank Food and Agricultural Policy Research Institute. In a bulletin, FAPRI forecast soybean plantings will be 1 million acres, or 1 percent, larger than farmers indicated in a March USDA survey. At the same time, they would reduce corn area by 1 million acres, also around 1 percent.
With normal weather and yields, the corn crop would total nearly 14.1 billion bushels, the second-largest ever. “The increase in production results in lower corn prices in 2016/17,” says FAPRI. It projected an average price of $3.48 a bushel, the lowest in a decade and 13 cents less than it estimated two months ago.
The outlook for soybeans is brighter — FAPRI raised its forecast of the season-average price by 35 cents, to $9.08 a bushel, based on stronger demand for the oilseed. “Futures markets in late April suggested even higher soybean prices, perhaps because of concerns about the South American crop and recent weakness in the value of the dollar.” The strong dollar has discouraged exports.
“Large global supplies continue to pressure wheat prices,” said FAPRI, in lowering its forecast of the season-average price to $4.69 a bushel, down 28 cents and the lowest in a decade. The USDA says the U.S. wheat stockpile will climb to a nearly a six-month supply at the end of May, when the new crop is ready for harvest.