As the grain markets and farmers alike await the March 31 Planting Intentions report from USDA, analysts’ acreage estimates are starting to emerge.
Allendale this week released its forecast for planted acres in 2016, based on its survey of producers in 25 states. Its prediction? That farmers will plant more acres of corn, just slightly fewer acres of soybeans, and less wheat this year.
Here are Allendale's numbers:
- Corn: 90.431 million planted acres versus USDA’s forecast of 90 million acres.
- Soybeans: 82.575 million acres versus USDA’s forecast of 82.5 million acres.
- Wheat: 51.769 million acres versus USDA’s forecast of 51 million acres.
“We are saying an increase over last year, mainly because we have more acres available,” said Rich Nelson, chief market strategist at Allendale. “A full 5.4 million acres will be added into the total planting mix for this year. That comes from prevented plant, CRP and those lower winter wheat acres.”
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What’s motivating this shift? Despite corn futures below $4, many producers still see corn as a better bet than soybeans this year.
“Current prices, as of writing, continue to favor corn plantings over soybean plantings on a projected return above operating cost basis,” wrote Christopher Narayanan, head of agricultural commodities research at Societe Generale in New York.
He expects farmers to plant the following in 2016.
- Corn: 89 million acres.
- Soybeans: 81.9 million acres.
- Wheat: 51 million acres.
Narayanan also sees planting season weather playing a role in those decisions. “With current weather generally favorable and suggesting an early spring, we could see further acreage shifts from soybeans to corn,” he wrote. “This could help to tighten the projected U.S. balances a bit further, providing some support to (soybean) prices.”
What about corn prices? It could all come down to weather. “The next catalyst to corn prices will be the condition of the U.S. growing season and the corn crops as it develops,” wrote Narayanan. “As elementary as that sounds, only a significant deviation from current supply and demand forecasts—likely supply—will drastically alter prices one way or another.”
What do you expect to plant this year? More corn? More soybeans? Let us know in the comments.