Acreage Preview: Putting it All Together

March 28, 2018 08:40 AM
 
Tomorrow’s USDA report is sure to bring surprises, which means it’ll be an important day to watch the markets.

Tomorrow’s USDA report is sure to bring surprises, which means it’ll be an important day to watch the markets. With potential shifts in five of the major U.S. row crops, no commodity is safe from quick market movement.

Last year USDA found corn on 90 million acres, a 4% decline from the previous year. Many experts are suggesting that number could drop even lower in 2018. Experts who spoke with AgWeb said corn would be anywhere from 89.5 to 90 million acres at the most.

“Because of the price performance of corn, everyone has been talking about a decline in corn acres for 2018,” said Farm Journal Economist Chip Flory. “Those expectations are probably right. How much of a decline? We can’t forget it’s corn. Guys will plant corn if they can plant corn.”

One thing is for sure, soybeans are likely going to beat corn in acres. “I’ve put soybeans at 91.3 million, up 1.1 million acres from last year, and recent surveys have shown even up to 92 million acres,” said Todd Hubbs, University of Illinois clinical assistant professor of agricultural commodity markets.

With weather woes in Argentina, the market for soybeans is strong. That, paired with lower cost of production when compared to corn, has made the legume a strong contender for “king” of crop acres this year.

Cotton is poised to gain more acres, too, with estimates over the 13 million mark in 2018. USDA recently pegged the crop at 13.5 million acres, with private estimates lower but still above 13 million acres.

Kansas, Oklahoma and North Carolina will lead states in year over year growth in cotton acres. Cotton will likely grow for one of three reasons: A new safety net program, it will replace peanut acres or wheat prices will push growers to cotton.

Keeping with the trend, spring wheat acres should grow this year, led by the Northern Plains. All in all, the crop could grow by about one million acres. Prices for corn and soybeans are pushing farmers who can to consider spring wheat, according to Flory.

“Right now, farmers in the Dakotas and Minnesota farmers have made the decision to plant more wheat than corn,” said Brian Doherty of Stewart Peterson.

Sorghum’s strong demand and low cost of production mean the grain’s acreage will grow—up to one million acres more than last year. The Food and Agricultural Policy Research Institute at the University of Missouri predicts it will grow to 6.31 million acres. Drought could drive farmers to plant this heartier crop—especially in the Texas and Oklahoma panhandles and elsewhere in Texas where drought conditions are challenging.

“South Texas Farmers have already started planting grain sorghum, and some of that crop is starting to emerge,” said Tim Lust, National Sorghum Producers CEO. “Time will tell what total planted sorghum acres will look like this growing season not only in Texas but across the Sorghum Belt.”

Keep a close eye on AgWeb tomorrow for updates as the reports are released. Jerry Gulke, of the Gulke Group and columnist for AgWeb, said to make sure you’re ready for anything.

“We don’t publicly release client surveys, as we feel them to be proprietary and often have been more accurate than those publicly released,” he said. “That’s especially true if there is a significant departure from what otherwise might be normal circumstances. Given that backdrop, I would expect a surprise, and have prepared accordingly.”

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