NOTE: This is what Chris Hurt expects to come from the USDA Prospective Plantings report to be released March 31.
The market incentives all winter have been telling farmers to plant more soybeans, but we have seen a reversal in the new crop futures, says Chris Hurt, a Purdue University Extension agricultural economist.
“The March 31 Prospective Plantings report is going to suggest that producers are going to plant less corn and in fact that may be bullish to corn,” says Hurt. “During the last three weeks, market prices for corn have actually increased the incentive to raise corn as soybean prices dropped more sharply.”
Hurt predicts when this is all pulled together, the report will be bullish to corn with surprisingly low acres and in response expects to see a rally.
“On the other hand, we will see so many acres in soybeans that it is probably bearish to bean prices, which will provide additional incentives to get more acres of corn in the ground,” Hurt says.
“I think Indiana producers will look for a few additional fields where corn can be planted rather than soybeans,” Hurt says. “The markets and the financial incentives provided by the grain prices, as well as the costs are very dynamic. Producers have some tough decisions to make this year, but they need to step back and make the best decisions they can.”
Hurt recommends producers go a little bit heavier to corn than they were thinking through the winter.
“We are already starting to be concerned about delays on the planting season,” he says. “There has been a lot of moisture recently and we are looking at cool moist conditions early into spring that could delay our corn planting. If corn planting is delayed that would naturally push us to plant more soybeans.”
From the March 31 report, we expect to see soybean acreage up 10% across the country at approximately 70 million acres, he says.
Hurt’s budgeting shows that Indiana farmers with average quality land saw a $20-40 premium to plant soybeans this winter.
“This means fewer corn acres,” Hurt says. “We expect corn acreage to be down 6 percent at about 88 million acres.
“Interestingly, the U.S. Department of Agriculture’s survey was done around the first of March, which was when soybean prices were peaking and we saw the maximum for the year on March 4 with new-crop futures at $14.66/bu. Since that time, soybean markets have gone down relatively more than what corn has and we have seen a reversal in the new crop futures.”
As a result of the increased corn prices we’ve already had, we’re going to see some producers look more heavily to corn, he said. However, Hurt says there can’t be a major change because the seed is ordered, the chemicals are ordered and many decisions are made.
Farmers are faced with many issues this growing season and we are so dependent on having a good crop in the United States this year, Hurt says.
“That good crop will start with how many acres can get into production of each of the commodities and secondly what can yields be given the weather conditions this summer,” he says.
For people wanting to learn more about the report, an outlook meeting that is free and open to the public will be held March 31 via IP-videoconference.
Host sites include Purdue Extension offices in Adams, Allen, Bartholomew, Clark, Dearborn, Decatur, Dubois, Grant, Hancock, Harrison, Hendricks, Marshall, Pulaski, Tipton and Vanderburgh counties. The outlook meeting also will be available for viewing from the Purdue West Lafayette Campus in Krannert, Room 661, the Southwest District Extension office and the Newton County Government Center.
For questions and more information contact Hurt at 765-494-4273 or hurtc@purdue.edu.