U.S. farmers to sow record soy acres, scale back on corn
One indicator analysts watch to assess acreage prospects is the price ratio of Chicago Board of Trade new-crop November soybean futures to new-crop December corn futures.
A soy-corn price ratio of roughly 2.5-to-1 or higher tends to encourage soybean plantings. The ratio settled Thursday at 2.44-to-1 but reached nearly 2.6-to-1 in mid-December, when producers were making seeding plans.
"The underlying trend toward greater row-crop acreage, combined with the high soybean/corn price ratio, leads to our expectation of record soybean acreage," CHS Hedging Inc said in a research note.
Wheat to Rebound in Northern Plains
Corn may lose acres in the northern U.S. Plains as farmers revert to spring wheat, the region's traditional mainstay crop. Corn acres have surged in North Dakota in recent years, tripling in the last decade as growers took advantage of warming temperatures, new hybrid seeds and historically high prices.
But potential returns for corn in the region have since declined sharply, making corn less attractive.
"I think a lot of those acres up there that went to corn on an experimental basis the last couple years - those guys have decided to go back to spring wheat," Roggensack said.
One wild card for spring wheat prices will be rail backlogs in Canada that have stalled the movement of last year's record Canadian spring wheat harvest to ports. That grain could hit the market in a shortened window this spring, depressing cash markets, said Shawn McCambridge, grains analyst with Jefferies Bache in Chicago.
"The logistical issues in Canada don't change the supply at all. You have a huge crop produced in Canada," McCambridge said. Nonetheless, McCambridge still expects an increase in U.S. spring wheat seedings.
The average analyst forecast for seedings of spring wheat other than durum was 12.3 million acres, up 5.8 percent from 2013. The average forecast for durum wheat was 1.8 million acres, up from 1.5 million in 2013.
Most U.S. wheat is winter wheat, planted in the fall and harvested in early summer. The average analyst estimate of winter wheat seedings for 2014 harvest was 42.157 million acres, compared with USDA's Jan. 31 estimate of 41.892 million.
The average analyst estimate of 2014 all-wheat plantings was 56.3 million acres, compared with 56.2 million seeded in 2013.