Mark Weinraub –
US farmers plan to seed a record amount of soybean acreage this spring, even with supplies trending near all-time highs, but wheat seedings will fall to the lowest on record, the government said on Friday.
Growers will dial back their corn seedings this spring despite signs of firm demand as record stocks have cast a bearish tone over the futures and cash markets this year, threatening profitability for farmers.
The US Agriculture Department said in its prospective plantings report that US soybean plantings were expected at 89.482 million acres. If realized, that would top last year’s soybean acreage of 83.433 million, which is the biggest to date.
Corn plantings were seen falling 4.3 per cent to 89.996 million acres.
Chicago Board of Trade soybean futures fell sharply after the report was released and the May contract closed at $9.46 per bushel, after hitting its lowest level since August 4. Corn futures dipped briefly before moving back into positive territory and closing up 6-3/4 cents at $3.64-1/4 per bushel, after reaching their highest level since March 20.
“It is a bearish report for beans on all sides, the stocks are higher and the switch away from corn was bigger than anyone figured,” said Jack Scoville, analyst at the Price Futures Group.
Analysts had expected the report to forecast soybean seedings of 88.214 million acres and corn seedings of 90.969 million, based on an average of estimates in a Reuters poll.
Wheat seedings were seen at 46.059 million acres, down from 50.154 million and the lowest on record. The average of analysts’ forecasts was 46.139 million wheat acres.
“This is the continuation of a long-term trend that I do not see reversing in the near future,” said Todd Hubbs, an assistant professor of agricultural commodity markets at the University of Illinois.
Wheat futures ended on Friday slightly higher with the May CBOT contract up 5-1/2 cents at $4.26-1/2 per bushel. Wheat prices are so low currently that many farmers are struggling to break even on the crop.
On the supply front, USDA said domestic soybean stocks as of March 1 stood at 1.735 billion bushels, the second-biggest on record and the largest on March 1 reading since 1.787 billion bushels in 2007. A year ago, soybean stocks were 1.531 billion bushels.
Corn stocks as of March 1 were a record 8.616 billion bushels, topping the 8.248 billion bushels reported in March 1987. A year ago, corn stocks were 7.822 billion bushels.
USDA said users burned through a record 3.770 billion bushels of corn from December 1 to March 1. The soybean drawdown during that time was 1.164 billion bushels, the third-biggest ever but lower than 2015 and 2016.
Wheat stocks stood at 1.655 billion bushels, the biggest since 1988. The bearish supply picture pushed wheat futures to two-month lows.
Analysts, on average, had expected soybean stocks of 1.684 billion bushels, corn stocks of 8.534 billion bushels and wheat stocks of 1.627 billion bushels.