US soybean sowings will set a record this year by an even bigger margin than previously expected – but corn plantings will make a more tepid recovery, despite the swing away from rival grain wheat.
Informa Economics upgraded by nearly 700,000 acres to 85.23m acres its forecast for US soybean sowings in 2016.
The revision took the estimate even further above the 82.0m acres which the US Department of Agriculture has pencilled in for domestic sowings of the oilseed this year.
Indeed, the Informa estimate would set a record by a margin, beating the 83.3m acres seeded two years ago.
Corn vs soybeans
The extra acres will come in part at the extent of corn, for which the seedings estimate was trimmed by 57,000 acres to 88.86m acres.
While above the 88.0m acres of corn that US farmers planted last year, plantings at that level would be well below the recent high of 97.3m acres, reached in 2012, besides the record high of 113.02m acres set in 1932.
The figure is also below the 90.5m acres which the USDA is expecting in US corn seedings this year.
However, soybean futures for November 2016, the benchmark new crop contract, have held relatively firm, standing at $8.89 ¼ a bushel on Tuesday, around late-September levels, underpinned by strong Chinese import data and concerns over the impact of dryness on Brazilian harvest prospects.
Chicago corn futures for December 2016, meanwhile, have fallen by about 5% over the same period, allowing the soybean: corn ratio to rise from some 2.15 to 2.28, signalling the increasing appeal of the oilseed to farmers, compared with the grain.
Wheat area drop
Many investors are expecting large increases in sowings of both crops this year, after the USDA last week estimated US sowings of winter wheat at 36.61m acres – down 2.85m acres year on year, and 2.7m acres below the figure that investors had forecast.
However, some scepticism surrounds the figure, with many southern farmers, for instance, who use winter wheat for cattle grazing at low grain prices, potentially designating the crop as pasture for now – but with the option to keep it for harvesting if values improve.
(Source – http://www.agrimoney.com/news/us-soy-sowings-to-set-record-by-even-bigger-margin-than-thought–9202.html)