2016 Planting: Expect Corn, Cotton Up; Soybeans, Sorghum Down – Survey

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Profit margins full of red ink could force growers to cut back crop acreage by almost 2% in 2016, according to the latest survey by Farm Futures, Penton Agriculture’s market-leading ag business resource.

Only corn and cotton could see gains among 5 major row crops and even those increases would keep seedings below levels from just two years ago. USDA releases its first survey-based estimate of Prospective Plantings March 31.

Farm Futures sees corn plantings at 90 million, up 2.3% from 2015, when adverse weather kept farmers from planting some 2.6 million acres. Some of the biggest gains could come in Illinois and Indiana, where yields suffered last year, while growers in the northwest Midwest, who enjoyed record yields, could also post increases.

  • Corn rallies are inspiring farmers to up their plantings. “Corn appears to be gaining ground by default, because farmers are a little more optimistic about rallies during the growing season, thanks to a lot of talk about potential for the El Nino to end soon. Our research shows that would increase potential for at least modest gains.”
    Growers put their average price target for 2016 corn at a futures price of $4.12. By contrast the average futures price target for soybeans was only $9.27, a dollar or more below break-even levels. “Farmers are banking on rallies because they still have a lot of 2015 production unpriced,” says Knorr. “Growers told us they have more than 40% of last year’s corn still in storage, with 30% of the soybean crop still unpriced.”
  • Cotton is expected to make a comeback of almost 11% to 9.5 million, after cutting back dramatically due to low prices and adverse weather a year ago. “Cotton prices aren’t profitable either, but growers don’t have many alternatives that look good in 2016,” said Bryce Knorr, Farm Futures grain market analyst, who conducted the survey. “That’s why overall acreage could continue to fall among major crops again this spring.”
  • Soybean farmers appear ready to cut back on the crop, following back-to-back record crops and yields. Farm Futures sees acreage of the oilseed falling to 82.2 million, down about .5% from 2015.
  • Sorghum, a feed grain planted primarily on the central and southern Plains, saw acreage surge last year after Chinese buying took prices to record premiums over corn. But with a surplus hanging over the market this year, prices are back to their traditional discount. Growers said they plan to cut acreage by almost 13% to 7.4 million.
  • Spring wheat seedings could be lower on the Plains,. The survey found farmers cutting acreage of the high protein grain by around 5%, to 12.6 million. That could bring all wheat seedings to 51.6 million, 5.5% lower than 2015.

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Farm Futures surveyed 1,246 growers from March 7 to March 23. Growers were sent an invitation by email, with results recorded by an online survey form. Over the last eight years Farm Futures March survey has deviated from USDA’s corn estimate by an average of 1.2%. For soybeans, the deviation is 3%.

Crop

Acreage

Change*

Corn

90 million

2.3%

Soybeans

82.2 million

-0.5%

Soft Red Winter Wheat

6.5 million

-8.9%

Hard Red Winter Wheat

27 million

-6.7%

White Winter Wheat

3.6 million

8.6%

All Winter Wheat

37.2 million

-5.7%

Spring Wheat

12.6 million

-5.1%

Durum

1.9 million

-3.5%

All Wheat

51.6 million

-5.5%

Sorghum

7.4 million

-12.9%

Cotton

9.5 million

10.7%

* vs USDA 2015 estimates

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