Just how big a record high will US soybean plantings set this year? Or will they even set a record at all?
Leading ag commentators give their views on US crop seedings prospects.
If you take a look at the profitability of the farmer in the seven or eight best producing states in the US it actually is profitable to produce corn again.
We're starting to do internal surveys with those 8,800 customers across our supply chain, and what we're seeing anecdotally is that we don't believe that [the fall in corn acreage] will be… as extreme as the market sees.
So our view is that in a normal growing season, that's all we can bet on, between 90m-93m acres of planting.
We estimate that US farmer will plant 90m-93m acres of corn in 2017 which will be below the million acres planted in 2016. This still is a strong number.
Our soybean forecast is positive. We think 87m-90m acres will be planted which would be a 5% higher than last year's 83m acres.
Despite the record or near-record corn and soybean crops expected this year, 2017 futures prices suggest continued profitability at the farm level for corn and soybeans.
We are forecasting 88m acres of corn, and for wheat to acres to remain flat at 50m acres
Current expectations for soybean planted acreage encompass a wide range of possibilities. Some observers place planted acreage levels at 89 million acres or greater.
The lower cost of producing soybeans relative to corn and the perceived price advantage of soybeans over corn drive expectations of an acreage shift from corn to soybeans. The price advantage of soybeans relative to corn maintains a strong soybean position.
Given the number of factors pointing toward greater soybean planted acreage in 2017, planted acreage near 87.4m is a reasonable expectation. Since 1996, an increase in soybean planted acreage exceeded 4m acres three times.
While the possibility exists for a 6m-7m-acre increase in soybean acreage this year, it would be one of the largest shifts in soybean planted acreage on the historical record.
Crop prices remain under pressure from last year's record yields. As a result, we expect US corn acreage to be between 90m-92m acres in 2017, down from 94m acres last year.
Soybean acreage, which requires fewer inputs, is expected to increase, but this impact will be partly offset by an expected increase in cotton and canola acreage in North America.
We are still under the impression soybean acres will not top corn acres in 2017, based on normal rotation and recent appreciation in corn over soybeans.
The November soybean: December corn ratio declined from its peak of 2.70 on December 1 to 2.57 as of Friday morning.
Row crop profitability projections still favour soybean plantings over corn, but we are not convinced there will be a net 11m-acre shift to soybeans, year-over-year. Nor ignore that producers plant corn to get to the soybeans.
New crop corn and soybean prices are generating similar operating profits of circa $3.80 an acre for US farmers, while soybeans are $33 per acre more profitable than corn on a net income basis..
Similar operating profits might result in a smaller-than-expected decline in US corn acreage during 2017-18. Hence, we are becoming a bit cautious on corn price prospects
Soybeans still makes economic sense, while corn remains the traditional crop for US farmers.