Grains jump as farmers set to plant less soy, corn
Excess in crop supplies caused gluts, leading to low forecasts for acreage
U.S. farmers put off by grain gluts that have dragged prices lower are planting less corn and soybeans this year, the nation’s two biggest crops.
Soybeans will cover 89 million acres in 2018, while corn may be planted on 88 million acres, the U.S. Department of Agriculture said Thursday in a report in Washington. The USDA forecasts for each came in below the lowest prediction in a Bloomberg survey of analysts. The Bloomberg Grains Subindex climbed as much as 3.1 percent, the most since July.
Years of bumper harvests have led to an overwhelming excess of crop supplies, spurring a multiyear rout for prices and dragging grower incomes lower. The government said last month that farmer profits will drop this year to the lowest since 2006. In a separate report released Thursday, the USDA pegged corn held in inventories as of March 1 at 8.89 billion bushels and soybeans at 2.11 billion bushels, both records for that date and above the average analyst forecasts. Lower U.S. plantings this year could help ease the overhang of supplies.
Soybean acreage in the U.S. this year will exceed corn plantings for the first time in 35 years, according to the government survey. Still, prices for the oilseed jumped as the lower-thanexpected plantings outlook raised concerns over tighter supplies amid drought in Argentina.
Last year, U.S. farmers planted 90.2 million acres of corn and 90.1 million acres of soybeans.
The USDA survey comes at a time of rising trade tensions and heightened anxiety for U.S. soybean farmers. China is said to be studying the potential impact of trade restrictions on the commodity, people familiar with the matter said in February.