U.S. farmers plan to seed a record amount of soybean acreage this spring, even with supplies trending near all-time highs, the government said March 31.
Growers will dial back their corn seedings this spring despite signs of firm demand as record stocks have cast a bearish tone over the futures and cash markets this year, threatening profitability for farmers.
The U.S. Agriculture Department said in its prospective plantings report that U.S. soybean plantings were expected at 89.482 million acres. If realized, that would top last year’s soybean acreage of 83.433 million, which is the biggest to date.
Corn plantings were seen falling 4.3 per cent, to 89.996 million acres.
Chicago Board of Trade soybean futures fell sharply after the report was released, sinking to 5-1/2-month lows. Corn futures dipped briefly before moving back into positive territory and trading near pre-report levels.
“It is a bearish report for beans on all sides, the stocks are higher and the switch away from corn was bigger than anyone figured,” said Jack Scoville, analyst at The Price Futures Group.
Analysts had expected the report to forecast soybean seedings of 88.214 million acres and corn seedings of 90.969 million, based on an average of estimates in a Reuters poll.
Wheat seedings were seen at 46.059 million acres, down from 50.154 million and the lowest on record. The average of analysts forecasts was 46.139 million wheat acres.
On the supply front, USDA said that domestic soybean stocks as of March 1 stood at 1.735 billion bushels, the second biggest on record and the biggest March 1 reading since 1.787 billion bushels in 2007. A year ago, soybean stocks were 1.531 billion bushels.
Corn stocks as of March 1 were a record 8.616 billion bushels, topping the 8.248 billion bushels reported in March 1987. A year ago, corn stocks were 7.822 billion bushels.
USDA said that users burned through a record 3.770 billion bushels of corn from Dec. 1 to March 1. The soybean drawdown during that time was 1.164 billion bushels, the third biggest ever but lower than 2015 and 2016.
Wheat stocks stood at 1.655 billion bushels, the biggest since 1988. The bearish supply picture pushed wheat futures to two-month lows.
Analysts, on average, had expected soybean stocks of 1.684 billion bushels, corn stocks of 8.534 billion bushels and wheat stocks of 1.627 billion bushels.