WASHINGTON, April 1, 2015 – With prices down, U.S. farmers plan to sow less corn than they did last year, but they will still be planting more of the grain than analysts were expecting. Soybean prices have also fallen, but with lower input costs, the oilseed will take up some of the area corn is giving up – reaching a record high – but still not as much as expected.
That’s the basic takeaway from Tuesday’s annual Prospective Plantings report, in which USDA provided its first survey-based estimates for planted acreage for the major U.S. crops.
Corn plantings are projected at 89.2 million acres — the lowest since 2010, and down about 2 percent from 90.6 million acres in 2014. Farmers are expected to plant a record 84.6 million acres of soybeans, up about 1 percent from 2014. Planted acreage intentions are up or unchanged in 21 of the 31 major soybean producing states.
“The increase in corn was a bit of a surprise, and the market has not responded favorably,” said John Anderson, American Farm Bureau’s deputy chief economist. Corn futures dropped by around 15 cents a bushel with this news, but the soybean market has remained relatively stable. But “it’s not too late for late acreage shifts,” Anderson noted. “So if corn is down that affects
soybeans prices as well.”
The Farm Bureau noted that USDA raised its estimates on corn and soybean acreage from the numbers released at the department’s annual outlook forum in February. Prospective planting estimates for corn increased from 89.0 million acres to 89.2 million. Soybean estimates increased from 83.5 million to 84.6 million acres.
It also pointed that USDA is predicting increases in planted acreage for other feed grains -- grain sorghum, barley and oats -- and that the combined increase for these three crops is almost 1.3 million acres. According to Farm Bureau, that almost completely offsets the projected year-over-year decline in corn acreage.
Iowa farmers plan to sow the most corn acres, 13.6 million, down 100,000 acres from 2014, followed by Illinois with 11.7 million acres (down 200,000), USDA said. Iowa is also expected to plant the most soybean acres, 10.1 million, up from 9.9 million in 2014, again followed by Illinois with 9.9 million acres, up from 9.8 million a year ago.
Iowa Soybean Association (ISA) leaders just returned from a 10-day trade mission to China, the world’s largest consumer of soybeans, with hopes that the Asian giant will keep buying more. The ISA delegation learned that China’s economy is projected to grow by about 7 percent.
“That should bode well for soybean demand over the next few years and possibly longer, but growth may be more moderate,” said Grant Kimberley, ISA market development director. “Potentially, this will help utilize production from extra acres.
However, ISA leaders heard mixed messages about soybean demand from Chinese buyers. Feed utilization for pork has and could flatten while aquaculture and poultry are expected to grow. The net result should be a slight increase in soybean demand.
Other Estimates for other crops from Tuesday’s report include:
· All wheat planted area for 2015 is estimated at 55.4 million acres, down 3 percent from 2014. Winter wheat planted area, at 40.8 million acres, is down 4 percent from last year but up less than 1 percent from the previous estimate.
· All cotton planted area is estimated at 9.55 million acres, down 13 percent from last year. Upland area is estimated at 9.4 million acres, 13 percent below 2014. American pima area is seen at 150,000 acres, down 22 percent from 2014.
The estimates were based on surveys conducted in the first two weeks of March that include a sampling of over 84,000 farm operators. The department will report on actual planted acreage in late June.
In a separate report, USDA said unsold supplies of corn on March 1 totaled 7.74 billion bushels. That’s up 11 percent from a year earlier and above trade expectations, keeping downward pressure on prices.
Soybean supplies as of March 1 were at 1.33 billion bushels, USDA said, up 34 percent from a year earlier. All wheat stored in all positions at the start of March totaled 1.12 billion bushels, up 6 percent from March 1, 2014.
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