While it was predicted corn acres would see an increase and soybean acreage would fall, both went beyond expectations in the USDA’s Prospective Plantings report released Friday.
Corn acres saw an increase of 4 percent from 2018, up to 92.792 million acres, while soybeans dropped 5.1 percent with an estimated 84.6 million acres to be planted.
Many analysts expected the shift to more corn due to uncertainty in regards to soybean demand amid ongoing trade strife, but the 4 percent increase was about 1.5 million acres more than many analysts predicted, said Standard Grain’s Joe Vaclavik.
“Farmers have every incentive in the world to switch out of soybeans and into corn,” he said. “The question now is: Is it feasible?”
Initial reaction from the markets, combined with reaction to Friday’s Grain Stocks report, was negative. Corn saw double-digit losses in the upcoming futures contracts. Soybean and wheat future contracts saw losses between 5-7 cents.
Todd Hubbs, a University of Illlinois professor of agricultural commodity markets, said there are a lot of things that can change between now and planting, especially considering the wet weather and flooding in the Midwest.
“We’ll see when we get to June, but it always depends on weather, and maybe this huge price decrease after this very bearish report might change some minds as well,” Hubbs said.
He said the lower projected acreage for soybeans was “somewhat supportive,” but because of the record stocks available there might not be a big impact in the market.
“We probably needed even fewer acres of soybeans than this in all honesty,” Hubbs said.
There has been a recent trend of soybean acreage increasing from the March report through planting season, and Hubbs said he wouldn’t be surprised to see that happen again this year.
“I don’t know if we’ll see it go much below the current estimate this year,” he said.
While many farmers are hopeful a trade deal with China could be a driver of demand, Hubbs and his colleague Scott Irwin, chair of agricultural marketing, indicated an agreement would likely be more favorable for the corn crop as opposed to soybeans.
For other crops, expected wheat acreage is down 4 percent while cotton fell 2 percent.
Wheat’s 45.8 million acres is the lowest all-wheat planted area since the records began in 1919, the USDA said.