Analysts expect planting intentions to favor soybeans when USDA releases its long-awaited Prospective Plantings report on March 31.
"I think USDA will increase acreage in beans significantly, by 5 million or 6 million acres and keep corn acreage close to last year," says Peter Georgantones, account executive at Abbott Futures in Minneapolis. "Spring wheat could be shortchanged." An increase of 5 million acres would by far be a record-high planting of soybeans.
Producers planted a record 77.4 million acres to soybeans in 2009. Last year, they planted 76.5 million acres to soybeans.
Allendale, a brokerage firm in McHenry, Ill., expects soybean planting intentions to surpass 83 million acres. Using Allendale’s estimate of harvested acreage and a trend yield of 44.29 bu. per acre, this year’s soybean production would be a record high 3.639 billion bushels. Last year’s production was 3.289 billion bushels.
With November soybean futures near $11.90 per bu., Georgantones thinks producers should have a third of their corn marketed.
Corn Not Forsaken
Georgantones expects producers to plant between 93 million and 94 million acres to corn this year, but some estimates call for only 91 million acres. USDA’s latest projection was 92 million acres.
"Farmers love to plant corn," he says. With July futures at $4.90, corn still provides a profit, assuming a breakeven of $4.25.
Allendale expects corn plantings of 92.349 million acres, the fourth largest since 1944. Using the firm’s estimate of harvested acreage and a trend yield of 163 bu. per acre, this year’s corn crop would be the second largest ever at 13.781 billion bushels. Last year’s record-large crop was 13.925 billion bushels.
"It’s going to be a tough year for farmers to make money. Next year could be even more challenging," says Georgantones. He recommends that corn producers have one-third of their crop sold at current price levels.
"I think we are close to the highs on corn," he adds.
One issue that USDA has not yet factored into its balance sheet is the effect that porcine epidemic diarrhea virus (PEDV)—first found in the United States in May 2013—will have on feed demand for corn. PEDV is being blamed for the recent sharp increase in hog and pork prices.
While it is way too early to talk about late planting, it’s not too late to talk about this year’s delayed spring.