USDA Sees 2016 Corn Acres at 90 Mil., Soybeans 82.5 Mil.

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US corn planted acreage in 2016 is now seen at 90 million acres, soybean plantings at 82.5 million, total wheat acres at 51.0 million and all cotton area at 9.4 million acres, according to updated acreage figures presented at the USDA Outlook Forum near Washington, DC, by USDA Chief Economist Robert Johansson. (link).

The figures mark a slight revision from acreage projections released in December that are contained in the long-term baseline projections report released last week by USDA. In their prior outlook USDA forecast corn plantings at 90.5 million acres, soybeans at 82.0 million, wheat at 53.0 million acres and 9.5 million acres for upland cotton.

Current prices for several commodities are lower this season, likely to result in some idling of land, Johansson said.

“Policy changes around the world are also impacting stock holding in the global market,” Johansson said. “Recent reforms in Argentina, including changes in export taxes and a sharp depreciation of the now free-floating peso, have improved prospects for agricultural production and trade in the country and reduced incentives for stockholding as a hedge against inflation.”

As for China, Johansson noted, “stocks in China, corn and cotton in particular, are large and overhang the market. China’s farm policy has used support prices for important commodities to provide a steady income for farmers, while restricting access to cheaper imports using a variety of border measures. As a result most of China’s agricultural commodities are now expensive relative to the rest of the world, with China holding an outsized proportion of global stocks for commodities, such as cotton, corn, rice and wheat.”

The figures from Johansson also confirm expectations for lower spring wheat area in the US for 2016. “We have already seen some decline in crop area for 2016 with winter wheat seeding down 2.9 million acres from a year earlier to 36.6 million acres, sending an early indication that lower prices are pressuring area,” Johansson said. “Spring wheat area is expected to follow suit, declining by 5 percent, leaving all wheat area down 3.6 million acres from last year at 51.0 million.”

Despite the downturn in wheat area, Johansson warned that “competition from other wheat exporters will continue to limit gains in the U.S. share of world trade and pressure U.S. farm prices lower.”

In 2015, corn acreage was at 88 million, soybeans at 82.7 million, wheat at 54.6 million and cotton at 8.6 million. The acreage forecasts from USDA would mark a 2.3% rise for corn, a 0.2% decline for soybeans, a 6.7% fall in wheat area but a 9.6% upturn in cotton acreage.

This would put the total for eight major crops (corn, soybeans, wheat, cotton, minor feedgrains and rice) would be 249.1 million, down1% from 251.6 million in 2015.

Comments: The figures do not mark a major shift in the prior outlook relative to 2016 acreage prospects and are near figures traders expected ahead of the release this morning of the data. However, the downturn in wheat area now seen by USDA confirms that spring wheat area is seen falling 5% in the year ahead, coming on top of the already confirmed downturn in winter wheat seeding. This now puts the focus on the balance sheets for individual commodities that will be released Friday morning by USDA analysts. However, Johansson did tip the hand of USDA analysts somewhat, noting “Strong competition from South America will likely limit any increase in exports, and as a result, U.S. corn ending stocks are expected to reach a 12-year high at the close of the 2016/17 marketing year, pushing prices lower.” And for soybeans, he also noted soybean supplies will be “record high” for the 2016/17 year. He also noted that rice ending stocks would be projected at their lowest mark in three years. So now the specifics are the key for the data Friday morning.

NOTE: This column is copyrighted material; therefore reproduction or retransmission is prohibited under U.S. copyright laws.