U.S. farmers seen planting more corn, less soy in 2019

The USDA estimates winter wheat seedings will fall to a 110-year low

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Reuters – American farmers will plant 92 million acres of corn this spring, up from 89.1 million last year, while reducing soybean acres to 85 million acres from 89.2 million in 2018, the United States Department of Agriculture projected Feb. 21.

The USDA projected U.S. all-wheat plantings for 2019 at 47 million acres, down from 47.8 million a year earlier, after winter wheat seedings fell to a 110-year low.

Why it matters: The United States is the world’s biggest corn supplier and the No. 2 exporter of soybeans and wheat so farmers’ planting decisions impact global prices.

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The drop in soybean acreage, if realized, would follow two years of record-high U.S. plantings of the oilseed, while corn acreage would be the largest since 2016.

Expanding global soybean stocks will likely discourage soybean plantings, Robert Johansson, the USDA’s chief economist, said at an annual outlook conference.

The USDA has projected that U.S. soybean supplies at the end of the 2018-19 marketing year will balloon a record 910 million bushels, doubling from a year earlier, due to rising South American soy output and a U.S. trade dispute with China, the world’s top soy importer.

“(U.S. soybean) sales to the (European Union), Egypt, Argentina, and many others are up this year… However, sales to other countries have not been enough to make up for the lost exports to China,” Johansson said.

Nonetheless, he added, “the decline in soybean acres is tempered by current forward pricing opportunities.”

New-crop November soybean futures on the Chicago Board of Trade settled Feb. 20 at about 2.4 times the price of new-crop December corn futures.

Johansson noted that the soy-to-corn price ratio is the lowest for this time of the season in three years, but still higher than it was in 2015 and 2016.

The USDA projected total U.S. wheat plantings for 2019 at 47 million acres, down 1.7 per cent from a year earlier. Johansson attributed the decline in wheat to wet weather last autumn that inhibited winter wheat seeding.

“Winter wheat planting conditions proved unfavourable across several states,” Johansson said, adding that plantings of spring wheat, typically seeded in April, could expand as the contraction in winter wheat seedings is expected to support wheat prices.

A Reuters poll of analysts estimated that corn plantings would rise to 91.5 million acres and soybean seedings would drop to 86.1 million acres. The poll put U.S. wheat plantings at 47.2 million acres.

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