US corn plantings are to come in 3.5m acres below current official forecasts because farmers are being tempted by high prices to switch to soybeans, KWS Group has said.

The German seeds company, for which corn is the biggest earner, told Agrimoney.com that it was expecting a "bit more of a reduction" in plantings than the 1m acre fall the US Department of Agriculture is expecting.

The group's forecast was for about 33m hectares (81.5m acres) of corn plantings this season, compared with a USDA estimate of 85m acres, a KWS spokesman said.

The fall reflected the delay in corn sowings bought on by rain – soybeans can often be planted later – combined with the soaring soybean prices.

'Trend continuing'

"The trend to greater cultivation areas for soybeans at the expense of corn is apparently continuing," KWS said in a statement.

The observation tallies with the thoughts of many Chicago traders, although CF Industries, the US fertilizer company, said last month that US corn plantings would "meet or exceed" the official 85m figure.

KWS added that Europe's sugarbeet plantings had "bottomed out" at about 1.6m hectares after cuts production prompted by reforms to the region's generous subsidy regime.

"Sugarbeet remains – despite the lower reference prices - an attractive crop for European farmers," the group said, adding that global plantings were "stable" at 4.23m hectares.

Raised guidance

The comments came as KWS raised its full-year guidance, thanks in part to "sharp" growth for corn seed takings forecast for the current quarter.

Overall sales for the year to the end of June will come in at least 15% higher than last year's E599m. Analysts had been expecting a rise of 10%, according to Reuters data.

In the January-to-March period, higher prices and the strong dollar more than made up for the drop in US corn plantings. Profits from corn rose 4.0% to E54.8m on revenues 13.4% higher at E156.9m.

The company's sugarbeet revenues grew 13.4% to E156.9m with profits rising 4.7% to E46.8m.

Market reaction

The report was well received by investors, with Andreas Heine, an analyst at Unicredit, saying it showed the group was "relatively immune to the macroeconomic environment".