A Record Planting Expectation For Soybeans
T. Marc Schober | Apr 01, 2015 12:56AM ET
Farmers are expected to plant a record number of soybean acres in 2015, at the expense of corn. Although both crops have seen a fall in price, corn has experienced a sharper decline. Estimated corn planted acreage dropped 2% from last year, marking the third consecutive decline in planted acres for corn. Combined corn and soybean acreage was 173.8 million, an increase of 0.5 million acres from the final 2014 total.
Consecutive years of record production in 2013 and 2014 resulted in elevated stockpiles for corn and soybeans. Soybeans led the increase with a 34% bump from 2014.
Corn planted acres for 2015 were estimated at 89.2 million acres, a 2% decrease from last year. The shift from corn to soybean acres is a result of a few items: the cost of producing soybeans is less than corn, soybean demand has been strong in the last six months, and prices of soybeans have not fallen as sharply as corn.
Soybean planted acres were estimated at 84.6 million, a 1% increase from last year and a record if realized. A soybean to corn price ration of roughly 2.5 to 1 encourages farmers to plant soybeans. The current soybean to corn price ratio is 2.3.
All wheat planted acres were estimated at 55.4 million acres, down 3% from last year. Of the total wheat acres planted 40.8 million were expected to be winter wheat, spring wheat at 13.0 million acres, and durum at 1.65 million acres.
Quarterly Stocks (Billion Bushels)
USDA reported 7.74 billion bushels of corn on hand as of March 1, 2015, an 11% increase from the same time last year. Of the total stocks, 4.38 billion bushels were stored on farms, up 13% from 2014. Off-farm stocks were at 3.36 billion bushels, up 7% from a year earlier. December 2014 to February 2015 disappearance was 3.47 billion bushels, compared to 3.44 billion bushels a year ago.
Soybean stocks increased 34% compared to last year with 1.33 billion bushels as of March 1, 2015. Stocks stored on farms totaled 609 million bushels, a 60% increase from last year. Off-farm stocks were 725 million bushels, up 18% from last March. December 2014 to February 2015 disappearance was 1.19 billion bushels, an increase of 3% from last year.
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Wheat stocks were up 6% from last year with 1.12 billion bushels being reported on March 1, 2015. On-farm stocks were estimated at 279 million bushels, up 17% from last March. Off-farm stocks were up 3% from last year, coming in at 846 million bushels. The December 2014 to February 2015 disappearance was 405 million bushels, down 3% from March of 2014.
Outlook
In line with what has been expected for the past six months, soybean acres increased for the third consecutive year as farmers attempt to capture the greater profit potential soybean prices are currently yielding. Do not be surprised if some farmers shift some soybean acres back to corn as final planting decision are made in the next couple weeks. The soybean harvest in Brazil remains only 61% complete as farmers battle wet conditions. Though production expectations have fallen, the Brazilian soybean crop is still expected to be massive. If the high yields are realized they would put further downward pressure on soybean prices making corn more appealing.
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