US farmers to raise sowings of most major crops this year - but not corn, soybeans


US farmers will raise sowings of most major crops, but not corn or soybeans, officials said in long-awaited forecasts for 2018-19, also foreseeing a rise in grain prices but a tumble in cotton values.

Robert Johansson, the US Department of Agriculture’s chief economist, kicking off the forecasting season for 2018-19 in earnest, said that the revival in agricultural commodity prices would spur an increase in US crop sowings.

“With commodity prices flat to rising slightly from last year we expect acreage to respond similarly,” he told the USDA’s much-anticipated annual forum.

With “input prices, from nitrogen to land rents flat to falling” too, officials expect a “slight expansion” in area seeded in the US to the top eight crops – barley, corn, cotton, oats, rice, sorghum, soybeans and wheat.

Indeed, sowings with these crops for the 2018 harvest were forecast rising by 3.2m acers to a four-year high of 255.3m acres.

Extra plantings

Rice area was seen rebounding by some 400,000 acres, equivalent to 16%, to 2.9m acres, with cotton seedings, including both upland and pima area, forecast gaining 700,000 acres to a seven-year high of 13.3m acres.

“Cotton area is expected to expand by over 5%, as the last two years have seen favourable prices for cotton,” Mr Johansson told the forum, in Virginia.

Wheat sowings – spring and winter-seeded crop combined – was pegged up 500,000 acers at 46.5m acres, the first rise in five years.

With the USDA already having reported a small decline in winter wheat sowings, the forecast implies a gain in plantings of spring wheat, prices of which, while largely flat since August, are above year-ago levels.

“Current price strength in spring wheat suggests we could get some expanded area in the northern Plains,” Mr Johansson said.

Corn, soybean prospects

However, neither of the two widest-planted crops will see area gains, with corn area seen easing from 90.17m acres in 2017 to 90.0m acres this year.

Soybean sowings, which reached a record 90.1m acres last year, will also come in at 90.0m acres, the USDA said, defying expectations among many investors that the rally in soybean prices prompted by Argentine woes would boost the appeal of the oilseed – although, as Agrimoney noted on Wednesday, on a year-on-year basis, relative pricing is little changed.

“For corn and soybeans, current price expectations and rotational constraints again push the combined area to 180m acres, evenly split between the two crops,” Mr Johansson said, albeit seeing soybeans prove particularly popular in the years ahead.

“We expect that the continued expansion of trade in soybeans will continue to put pressure on corn [sowings] but more likely other crop area in the future,” he said.

“Our latest long-term baseline suggests soybean area will match or exceed corn area for much of the next decade, supported by import demand from China.”

And the “dominance of China in the soybean market will not only continue but grow in importance over the next decade”.#

Soy, cotton price declines

The trend will not, however, be reflected in higher prices of soybeans next season, with the USDA forecasting farmgate values easing $0.05 a bushel to a three-year low of $9.25 a bushel, “as large US stocks hold prices in check”.

Cotton prices will fall more steeply by 6 cents a pound, or 8.7%, to 63.00 cents a pound in 2018-19, also a three-year low.

However, “some prices [are] expected to edge up”, the USDA said, foreseeing that while “the combination of rising stocks and continuing large global production have limited upside potential for prices… we do expect increase in demand relative to production in the upcoming year”.

Grain price prospects

Wheat prices were forecast next season at a three-year high of $4.70 a bushel, up $0.10 a bushel year on year.

Mr Johansson noted that “last year’s drought in the northern Plains and current dry conditions across much of the winter wheat areas have supported prices despite large US and global stocks”.

Corn prices were also seen rising by $0.10 a bushel in 2018-19, to a three-year high of $3.40 a bushel.

“We expect a small rebound in prices and a return to trend yields,” Mr Johansson said.


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