When USDA releases its annual Acreage report today, analysts expect it will show the largest U.S. soybean plantings on record, as growers pare back on corn to pursue rising prices for soybeans on the futures markets. Bad weather damaged the soybean crop in South America and created an unexpected opening for U.S. farmers to make some money three years after the collapse of the agricultural boom.
Traders said in surveys conducted by Dow Jones, Bloomberg and Reuters that they expect soybean plantings of 83.9 million acres, corn plantings of 82.8 million acres and wheat sowings of 49.8 million acres. Soybeans would be 2 percent larger than farmers indicated in a March survey by USDA, corn would be 1 percent smaller and wheat would be marginally larger, but still the smallest planted area since 1970.
With normal weather and yields, the corn crop would be a record 14.3 billion bushels and soybeans would be 3.87 billion bushels, the third-largest crop ever. The soybean harvest would be 2 percent larger and corn would be 1 percent smaller than USDA projected earlier this month, but the comparative size of the crops — corn setting a record and the soybean crop ranking No. 3 — would stay the same.
Bloomberg said 13 percent of farmers who took part in a Doane Advisory Services survey this month said they planted more soybeans than originally planned.
Economist Gary Schnitkey said soybeans would be more profitable than corn for farmers with high-yielding land in the Midwest at current prices, a turnabout from the outlook six months ago. Returns from soybeans are forecast to be $100 an acre higher than earlier estimates, Schnitkey said at the farmdoc Daily blog. “Even given this price increase, projected returns contained in the June version still will result in very low incomes on Illinois grain farms,” he said.
“Overall, this year’s erratic U.S. weather and soybeans’ strong price rally because of excessive cutting both Brazil’s and Argentina’s crops has us expecting corn seedings to retreat” and soybean plantings to rise, said Price Futures Group. “Shifting price relationships and regional wet weather have likely reduced corn seeding while upping oilseed and cotton plantings.”
The United States is the world’s largest soybean grower and the second-largest exporter. Brazil is No. 2 in soybeans but is the leading exporter. Argentina is the third-largest grower and the leader in exports of soyoil and soymeal.
USDA also will release its quarterly Grain Stocks report today. Traders say corn and soybean inventories will be ample, helping to hold down commodity prices. The stockpiles are expected to be larger than a year ago on June 1.