US soybean planting estimates up on 2014 as corn falls

The 2015 Prospective Plantings released by USDA shows slight declines expected in corn, wheat and cotton acres this year while soybean plantings are expected to increase moderately.

While the report may have solidified some boundaries for market prices but its impact is not long-lasting, according to Mark Ash, agricultural economist of USDA Economic Research Service. The market’s direction will be largely determined by the weather for spring planting together with the USDA’s May supply and demand report and confirmation of the planting data in the June 30 Acreage report, Ash told Agri Investor.

Wheat prices have staged a modest rally recently not due to the acreage report but because of deteriorating crop conditions in the central and southern plains, Ash wrote in an email, and corn prices weakened following the USDA’s report.

According to the data released on March 31, corn planted acres are expected to decrease 2 percent to 89.2 million acres. If realised, this will be the third consecutive year of corn acreage declines and would be the lowest level since 2010.

These falls are expected across most of the Corn Bell except Minnesota and Wisconsin where planted corn acreage is expected to increase, and Nebraska where it will remain unchanged on 2014 levels, according to the report.

“For corn we are looking at acres coming in much higher than what was anticipated by the trade, about half million more than expected,” said Randy Martinson, managing partner of Progressive Ag Marketing, in a commentary for the Minneapolis Grain Exchange crop call. “That surprised everybody in the trade and that’s, I think, part of reason why we are seeing the corn market on the defence.”

The 2015 planted area for soybean is targeted at a record high of 84.6 million acres, up 1 percent from 2014 levels. Wheat and cotton acreage are expected to drop 3 and 13 percent, respectively however. The 2015 winter wheat planted area, at 40.8 million acres, is down 4 percent from last year but up less than 1 percent from the previous estimate, according to the report. All cotton planted area for 2015 is estimated at 9.55 million acres, 13 percent below last year’s levels.

“This is pretty close to what the market was anticipating,” said Mark Ash, agricultural economist of USDA Economic Research Service, in an email, about the declining cotton acreage. “Cotton prices have been depressed by a global glut of stocks. A large share of these stocks is in China, so its restrictions on cotton imports (to trim stock level) force much of the supply adjustment onto other producing countries.”

Read the full report here.