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US soy area to hit record in 2014 as corn declines

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Corn sowings in the US will fall for the first time in six years in 2014, with farmers turning en masse to soybeans – for which plantings will hit a record high – leaving wheat seedings largely unchanged.

Informa Economics - in its first forecasts for next year's US crops, which came as it revised estimates for the ongoing harvests - pegged corn plantings at 92.7m acres.

While still a high figure by recent standards, exceeded only three times since World War II, that would represent a sharp fall year on year.

The US Department of Agriculture pegs US corn sowings this year at 97.4m acres, although many observers believe that figure is too high, by at least 1m acres, after an unusually wet spring prompted many growers to abandon some fields.

Soybean record

The land freed up from corn will go in the main to soybeans, for which sowings will jump to a record 83.6m acres, the Informa data showed.

That is 6.4m acres above the USDA's current estimate of US plantings this year.

Wheat area will come in at 56.7m acres, all varieties included, compared with the official estimate of 56.5m acres for this year's crop, if still a low figure by historical standards.

How accurate?

Sowings forecasts made so far in advance are unlikely to be wholly accurate, depending in part on weather at the time – this year, for instance, wet weather was seen encouraging some US farmers to plant soybeans, which can be later seeded, rather than corn.

However, some idea of likely allocations can be gauged from futures markets, and the relative prices of the different crops, although these are likely to change as the fate of South American crops to be harvested early in 2014 unwinds.

In Chicago, the much-watched ratio on a 2014 basis for November soybeans, the first new crop contract, to December corn stood at 2.39:1 on Friday, well into the area typically seen as encouraging sowings of the oilseed over the grain.

While traders use different tipping points, 2:1 and 2.25:1 are common ones.

A year ago, Informa forecast 2013 corn plantings at 97.5m acres and soybean area at 79.9m acres, with wheat sowings pegged at 57.1m acres.

Estimates for 2013

Informa's latest forecasts came as the analysis group lifted by 149m bushels to 13.889bn bushels its forecast for this year's US corn crop, a figure 46m tonnes above the USDA estimate.

Informa used a harvested area of 88.1m acres, 1.0m acres below the official estimate, but a more optimistic yield of 157.6 bushels per acre.

For soybeans, the production estimate was raised by 60m bushels to 3.224bn bushels, again reflecting a sub-USDA forecast for area, of 75.99m acres, but a higher yield figure, of 42.4 bushels per acre.

The USDA sees the soybean harvest at 3.149bn bushels.


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