USDA: Corn to overtake soybean plantings
November 6, 2018
In a reaction to the market conditions created by President Donald Trump's tariffs on Chinese products, corn will exceed soybeans as the No. 1 planted crop beginning in 2019, according to an analysis of USDA data that was recently released.
Corn plantings are expected to run 9 to 10 million acres ahead of soybeans between 2019 and 2023, the Agriculture Department said in its agricultural baseline released over the weekend.
Corn plantings are at 92 to 93 million acres a year, and soybeans at 82.5 to 84 million acres annually, the Food & Environment Reporting Network noted in its analysis.
"The USDA says corn will be the acreage king for years to come while soybeans recover slowly from the loss of sales to China, which used to buy one of every three bushels of U.S. soybeans," wrote Chuck Abbott, a veteran commodity analyst who is a FERN editor.
"Last winter, USDA analysts projected a marathon between the crops for the coming decade," Abbott continued.
"Instead, corn will cruise with strong demand and lean stockpiles. The first 15-billion-bushel corn crop could be harvested in 2020, growing to 16 billion bushels in 2025, while soybean production may not approach this year's level until 2027 or 2028.
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"In contrast to a decline in corn stocks, the soybean 'carry-over' at the end of this marketing year is forecast at a record 885 million bushels. The USDA baseline says it will take six years to work the stockpile down to its September 2017 size, for roughly 300 million bushels."
Corn prices are strengthening, suggesting it will be more remunerative than soybeans, where prices are expected to improve marginally for the 2019 crop, said the USDA baseline
Net returns over variable costs, such as seed, fertilizer and fuel, would be $344 an acre for corn and $273 an acre for soybeans based on expenses nationwide for the new crop.
The USDA does not project fixed costs for crops, which include land payments and taxes. ❖