August 27, 2008


US 2009 soy acreage to increase at wheat's expense 


Penny-pinching farmers will boost soy acreage and hold corn plantings steady next spring, according to a survey by Farm Futures.


In the battle for acreage, wheat appears to be loser.


Farmers are signalling the intent to plant about 5 percent more soy than they did in 2008, when 74.8 million acres were planted, without giving up corn acreage. As a result, much of the 3.7 million additional acres of soy in 2009 will likely come from winter wheat, the survey said.


The survey showed winter wheat seedings declining 1.6 million acres from the 2008 level of 46.6 million acres.


"Cash prices for soft red winter wheat have been persistently weak, despite historically high futures prices in Chicago," the survey noted.


The survey found corn-planting intentions to hold steady at 87 million acres, the same level of estimated acres seeded in 2008. Demand for the crop remains strong, but corn costs more to produce than soy and is likely limiting acreage increases.


"Anecdotal reports from farmers indicate they are very concerned about the financial risk of growing corn next year, due to rising production costs," said Bryce Knorr, who directs the research. "Our survey would seem to suggest that 2009 crop corn prices must rise to attract the acres needed to meet demand."


Farmers cut corn acreage in 2008, after record plantings in 2007, due to strong soy prices, but costs are likely the dominant reason for 2009 crop decisions, a report summary said.


"The ratio of new-crop soy to corn prices is much lower than it was last winter, suggesting cost, rather than prices is driving farmer decisions," said market analyst Arlan Suderman.


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