More soybeans and spring wheat acres are planned for 2008. That means corn acres will drop to 87.7 million from last year’s huge 93.6 million acres, according to the latest survey by Farm Futures magazine. The magazine based the findings on an email survey of 974 growers from Feb. 28 to March 14.
Farmers intend to plant 71.8 million acres of soybeans this spring, up from 63.6 million last year. Spring wheat acres will increase to 14.3 million, up 1 million from 2007. Total wheat plantings should hit 63.9 million acres, compared to 60.4 million acres last year.
"Farmers once again showed they’re ready to respond to the market’s signals," said Bryce Knorr, Farm Futures senior editor. "And the market is telling them to plant more soybeans due to very tight projected Sept. 1 supplies in the U.S."
"Questions about acreage are only beginning," says Knorr. "Farmers planted much more corn last year than their March intentions indicated, while soybean acreage dropped sharply.
Arlan Suderman, Farm Futures market analyst, warns that the big increase in soybean plantings found in the survey may not be enough. "Many will look at the increased soybean acreage estimate as an opportunity to rest easy, that the market has done its job," says Suderman. "However, a move to 71.8 million acres is barely enough to maintain soybean stocks at a tight level if the crop achieves trend yields this year. That will keep traders very nervous through the growing season, ready to quickly react to any perceived threat to the crop."
"On the other hand, the drop of nearly 6 million acres of corn is more than that market can allow to happen. A drop of that magnitude would require significant price rationing of demand to prevent the corn pipeline from running dry, even if trend yields are achieved."
Suderman predicts a long and volatile growing season in the commodity markets with wide price swings becoming the norm until supply and demand are brought into balance.
Source: Farm Futures Magazine