Chicago | Reuters — U.S. corn and soybean prices fell on Thursday as commodity traders reacted to forecasts of increased corn plantings and grain production, as well as predictions of falling prices in the coming growing season.
But wheat futures bounced back during the day’s trading, firming for the first time in six sessions on signs of growing global demand and expectations of reduced U.S. planted acreage.
The U.S. Department of Agriculture’s revised grain acreage forecasts, released Thursday morning at its annual two-day Outlook Forum, predicted that U.S. farmers will cut plantings of the eight major crops by one per cent to 249.1 million acres in 2016, with expectations for weak prices cutting into seedings.
While total acreage is expected to be down, farmers are expected to boost corn seedings by two million acres, to 90 million, according to USDA projections.
One forecast made some investors suspicious: USDA projected soybean plantings would be at 82.5 million acres, down slightly from 82.7 million.
Traders said they were expecting the agency to predict farmers would plant more corn and soybeans this year than last year as they scramble to stay solvent in the face of declining crop prices.
“There are more acres to go around this year,” said Terry Linn, analyst with the Linn Group in Chicago. “There are less wheat acres. Sorghum acres will be down due to Chinese demand drying up. Even cotton acres are going to be down.” Farmers could plant soybeans for that reason, he said.
Corn and soybeans also were pressured by the International Grains Council (IGC) raising its forecast for global corn production in 2015-2016 to 969 million tonnes, up from the prior month’s forecast of 959 million — though still below the previous season’s 1.016 billion.
The IGC also forecast a one per cent expansion in global corn area for the 2016-17 crop.
Chicago Board of Trade front-month corn closed at $3.55-1/2 a bushel, down one per cent (all figures US$). Front-month soybeans closed at $8.59 a bushel, down 0.9 per cent.
Front-month wheat closed at $4.45-1/4 a bushel, up 0.2 per cent.
Export sales of corn and soybeans last week were within the range of trade expectations while wheat sales topped expectations, according to USDA data on Thursday.
But season-to-date sales of all three commodities continued to lag the pace needed to reach USDA’s full-season export outlook.
— P.J. Huffstutter reports on agriculture and ag commodity markets for Reuters from Chicago. Additional reporting for Reuters by Karl Plume in Chicago.