U.S. farmers will plant less corn and soybean land than expected this year, despite a surge in commodity prices, suggesting that tighter grain supplies will persist into 2022, said the USDA on Wednesday. Although with normal weather and yields, the corn and soybean harvests could be the second largest ever, they will not be quite as large as projected by traders and the government.
A surge in exports, led by large sales to China, is cutting into U.S. grain stockpiles and driving corn and soybean futures prices to their highest levels in years. Traders expected farmers to respond by planting an additional 9 million acres of corn and soybeans, the two most popular crops in the country. Instead, the increase will be a combined 4.8 million acres, growers told the USDA in a survey conducted during the first two weeks of March.
Corn and soybeans are the foundation of the U.S. food supply. They are used in livestock rations, aiding production of meat, dairy, and eggs, and as ingredients in a variety of baked and processed foods. Between them, they would account for 56% of the land occupied by the two dozen “principal” U.S. crops, from wheat to chickpeas and hay this year.
With the planting season at hand, farmers said they would plant 91.1 million acres of corn, a scant 320,000 acres more than in 2020, and 87.6 million acres of soybeans, an increase of 4.5 million acres, or 5%, from last year.
The corn harvest this fall could be 15 billion bushels, and the soybean crop might total 4.4 billion bushels, based on USDA projections of yields and land planted but abandoned. That would mean 2% less corn and 3% less soybeans than if growers planted the amount of land expected by traders.
Futures prices spiked “limit up,” rising by the maximum allowed in one day, at the Chicago commodity exchanges following release of the Prospective Plantings report. The limits of 25¢ a bushel for corn and 70¢ a bushel of soybeans will be increased on Thursday, to 40¢ for corn and $1.05 for soybeans.
“I’m not sure why the farmer is not planting fence post to fence post, but he was not planning to when surveyed,” said Jack Scoville of the Price Futures Group. “So I’m not sure I believe the numbers. But they are what we got, and we have to ride them for now.”
Jason Roose of U.S. Commodities said tightening U.S. supplies were driving commodity prices. “Larger acres are felt to be needed with stocks at multiple-year lows, with a margin of error tight going into spring,” said Roose. The USDA quarterly Grain Stocks report, also released on Wednesday, showed less corn, wheat, and soybeans in storage than a year ago.
U.S. corn and soybean stockpiles are expected to the smallest in seven years when this year’s crops are ready for harvest in late summer, according to a USDA estimate in mid-March. It says the “carry over” might be a bit larger in fall 2022 if there are bumper crops this year.
Growers will plant 5% more wheat this year than in 2020, led by a 9% expansion of winter wheat acreage, said the USDA. With normal weather and yields, that could result in an averag-sized crop of 1.9 billion bushels. Cotton plantings of 12.04 million acres would be marginally smaller than last year.
Plantings of the eight major crops — wheat, corn, sorghum, barley, oats, rice, soybeans, and cotton — will total 252 million acres this year, compared with 245 million acres last year, according to the USDA survey of 78,900 farm operators. The margin of error for projected crop plantings varies widely by crop; for corn it is 3.7%, but for upland cotton it is 12%.
The Link LonkApril 01, 2021 at 09:09PM
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U.S. survey indicates corn and soy crops will be smaller than expected - Successful Farming
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