The U.S. is awash in soybeans, the result of the trade war with China — which has crimped exports — and a string of bumper crops that are clogging storage bins. Although farmers were expected to respond by planting more corn this year while cutting back sharply on soybeans, there is skepticism that a large rush to corn will actually occur.
Soybeans may be nearly as profitable as corn in the Midwest this year, said economist Gary Schnitkey of the University of Illinois after comparing likely expenses and revenue from the two crops. “Projected returns call into question assumptions of large switches of acres from soybeans to corn,” wrote Schnitkey at the farmdoc Daily blog.
Traders expect soybean plantings of 86.1 million acres this spring, down by 3.5% from 2018, according to surveys released by Reuters and Bloomberg on Wednesday. Based on conditions last fall, the USDA has projected a plunge of 7.5% in soybean plantings, while corn plantings would grow by a bit more than 3%, to 92 million acres. The USDA’s annual Outlook Forum, which opens today, is traditionally a time when its analysts update their figures.
A year ago, soybeans were expected to become a perennial challenger to corn as the most widely planted crop nationwide, due to strong global demand for the oilseed, especially in China. Soy plantings nearly equaled corn plantings in 2017 and nosed ahead last year — 89.2 million acres of soybeans vs. 89.1 million acres of corn. With the soybean stockpile forecast to swell to a record 910 million bushels by the time this year’s crop is ready for harvest, the common belief has been that corn would be more profitable this year, while the prospects for soybeans hinge on trade negotiations.