U.S. farmers intend to sow 3 million fewer acres of corn and soybeans this year than in 2017, said the USDA in its annual Prospective Plantings report, a surprising development that could draw down overly abundant U.S. stockpiles and bolster weak commodity prices. Corn and soybeans, the two most widely planted crops in the nation, are used as food ingredients as well as to feed the cattle, hogs, and poultry that become the U.S. meat supply.
In a USDA survey, growers said they would reduce corn and soy plantings by a combined 2 percent, or 3.3 million acres, from last year. Commodity traders had expected plantings to hold steady or rise marginally. Corn futures prices leaped by nearly 4 percent and soybeans by more than 3 percent at the Chicago Board of Trade following release of the report.
Even if farmers follow through on their plans, they would reap the third-largest soybean crop and the fourth-largest corn crop on record, assuming traditional rates of shrinkage between planted and harvested area as well as normal weather and yields.
In another noteworthy development, for the first time since 1983, growers will plant more soybeans, 89 million acres, than corn, 88 million acres, according to the USDA survey of 82,900 growers conducted during the first two weeks of March. The USDA projects that soybeans will be the No. 1 crop for years to come; a University of Missouri think tank, on the other hand, says corn will remain king. Either way, the difference in plantings between the crops from year to year would be small.
Corn and soybeans are grown in many of the same states and often in rotation with each other to reduce pest and weed control costs. Last year, there were 90.2 million acres of corn and a record 90.1 million acres of soybeans.
Private consultant Bob Young said trade turmoil had weakened the price outlook for corn in the weeks leading up to the USDA report. China, Canada, and Mexico buy more than 40 percent of U.S. ag exports. China has threatened retaliation against ag exports in response to U.S. tariffs on a range of its products. Canada and Mexico are involved in negotiations for a new NAFTA.
While corn and soybean plantings would decline this year, wheat area would rise by 3 percent and cotton by 7 percent. At 47.3 million acres, wheat plantings would be at their second-lowest total since 1919. For the first time since 2001 and 2002, the United States could see back-to-back wheat crops of fewer than 2 billion bushels. Projected cotton plantings of 13.5 million acres would be the largest since 2011. The National Cotton Council said in early February that cotton acreage would rise this year because the profit outlook for competing crops, such as corn, wheat, and soybeans, was worse.
Plantings of the eight major field crops — wheat, corn, sorghum, barley, oats, rice, soybeans, and cotton — would total 251.4 million acres this year, a negligible decline of 700,000 acres from 2017. The eight major crops account for the giant’s share of U.S. cropland. They are part of the two dozen “principal” crops, which also include hay, canola, sugar beets and cane, and edible beans, that would cover 319 million acres this year.
Among the three minor feed grains, sorghum and oats plantings are projected to rise by 5 percent and barley plantings to fall by 8 percent. Barley plantings, at 2.29 million acres, would be the smallest in USDA records. Oats would be the fourth smallest.
Based on farmers’ planting intentions, the corn crop could total 14.0 to 14.1 billion bushels and soybeans 4.2 to 4.3 billion bushels. Consumption during the 2018/19 marketing year, which follows this fall’s harvest, is projected to be higher than that, perhaps 14.5 billion bushels of corn and 4.4 billion bushels of soybeans, which would pare U.S. reserves somewhat.
Along with the plantings report, the USDA released its quarterly Grain Stocks report. The corn stockpile of 8.888 billion bushels on March 1 was larger than traders expected, but soybean stocks of 2.107 billion bushels and wheat stocks of 1.494 billion bushels were slightly smaller than expected.