Soybeans remain in the spotlight for the 2018 acreage battle—a result of robust global demand and profit potential.
“Corn went down this week and beans went higher,” says Jerry Gulke, president of the Gulke Group. “And that was in spite of the fact that three major firms—ourselves, Allendale and FCStone—are saying corn will drop 1 million to 1.5 million acres and soybeans will be up 2 million acres.”
For 2018, Allendale expects 92.104 million acres of soybeans to be planted—around 2 million acres more than last year. The firm expects 88.514 million acres of corn to be planted, which would be the lowest level in three years. Wheat plantings are estimated at 46.889 million acres.
USDA isn’t as bullish, as of now, on soybeans. For 2018, USDA predicts corn and soybean acres will match—with 90 million acres dedicated to each crop. Wheat plantings are estimated at 46.5 million acres, per its late-February Ag Outlook Forum. (USDA will update its acreage estimates on March 29.)
Gulke says soybean acres may increase even more than 2 million acres, but it may take several months for that to solidify.
Even with a building bullish story for soybeans, prices have stayed strong. “It’s almost like the market doesn’t believe it,” Gulke says. “Or it is telling us, ‘I don’t care if you plant 92 million acres of beans. We’re going to need 2 million acres of beans.’”
This market story is giving farmers more reason to consider planting additional soybean acres, Gulke says, especially with lower corn prices.
Gulke encourages farmers to study U.S. soybean carryout patterns, as they signal robust demand. He will provide additional analysis on soybean carryout with his written report on Monday.
Find Jerry Gulke’s current market insights online. On Mondays he provides in-depth written commentary on the “rest of the story” with accompanying charts, and on Fridays he shares audio commentary. Visit AgWeb.com/gulke