In its first planting report of the season, the U.S. Department of Agriculture on Monday is expected to report a significant shift in planted acreage to soybeans from corn because prices favor the oilseed.
Estimates gathered from analysts, including Farm Futures, by news services, all show a move to soybeans. Farm Futures is one of the few private organizations surveying growers, so Monday's USDA report will provide the best reading yet about what farmers are thinking, with the main thrust of spring planting in the Midwest still a few weeks away.
"Farmers have wanted to plant more soybeans for several years now, after pushing corn seedings to 70-year highs to capture profits from the ethanol boom," said Bryce Knorr, senior market analyst at Farm Futures. "Soybean prices provide that opportunity in 2014. Soybeans look more profitable than corn for the first time since 2006, though projected returns from both crops look significantly lower from the last few years."
Last year a wet spring prevented a number of corn and soybean fields from being planted and while many of those acres should return to production this year they may be planted to soybeans.
A Reuters survey of analysts resulted in average corn acreage of 92.748 million, soybeans at 81.075 million and all wheat at 56.277 million. Bloomberg's survey put average corn acreage at 93.01 million and soybeans at 81.162 million. At its outlook forum in February, USDA estimated 92 million for corn and 79.5 million for soybeans, compared with 2013's 95.4 million and 76.5 million, respectively.
How will the March 31 USDA reports impact your bottom line? Farm Futures Senior Market Analyst Bryce Knorr and Farm Futures Senior Editor Bob Burgdorfer will discuss the reports and the spring weather outlook in a free webinar April 7 at 7 p.m. CDT. Learn more about the Farm Futures webinar.
Prices favor soybeans
Chicago Board of Trade November soybeans largely traded between $11.80 and $11.90 in March. While that is down about 5% from $12.40 to $12.50 a year earlier, December corn is down about 10% this year ranging from $4.80 to $4.90.
"Our survey showed the biggest increases in soybeans coming in the eastern Midwest, where corn really boomed previously. Growers on the northern plains also want to plant a lot of soybeans, though percentages are inflated by all the ground lost to prevented planting in 2013," said Knorr.
Winter wheat acres seen down, spring wheat up
Winter wheat acreage, which was planted last fall, should be down due largely to lower prices. However, the spring wheat area may be higher as prices favor farmers in the northern Plains shifting away from corn. Farm Futures estimates the winter wheat area at 42 million, versus USDA's year ago number of 43.09 million.
Related: Weekly Wheat Review
Spring wheat acreage was estimated at 12.296 million by Farm Futures, compared with USDA's 11.596 million in 2013.
"Growers told us they hope to boost spring wheat seedings back to levels from 2012, following a disastrous spring on the northern Plains that caused almost 1.7 million spring wheat acres in North Dakota alone fail to get planted," said Knorr.
Also, on Monday, USDA will issue its quarterly grain stocks, with analysts, on average, predicting declines in soybeans and wheat from a year earlier, and an increase in corn. Considerable attention will be focused on the soybean stocks, which are estimated at 989 million bushels in the Reuters survey, as strong exports likely pared those supplies to a critically low level.
Farm Futures put soybean stocks at 981 million bushels, compared with USDA's year-ago number of 998 million. Bloomberg's survey put stocks at 987 million.
Related: Weekly Soybean Review
Wheat stocks were estimated at 1.030 billion bushels by Farm futures, 1.042 billion by the Reuters survey and 1.050 billion by Bloomberg, versus USDA's 2013 number of 1.235 billion. Corn stocks should be higher as they will compare with drought-reduced supplies from the 2012 harvest, with Farm Futures estimating 6.952 billion bushels, Reuters 7.099 billion and Bloomberg 7.098 billion.