CHICAGO (Reuters) - U.S. farmers are likely to plant a record amount of land with soybeans in 2018 and will also boost the area devoted to most other major crops, the U.S. Agriculture Department said on Tuesday.
If the forecasts are borne out, then another year of bumper supply could prolong a global glut of grains that has kept prices of soybean and corn depressed for years. Low prices for basic grains have hurt farmers’ incomes worldwide.
The USDA’s Office of the Chief Economist forecast that farmers will seed 91.0 million acres of soybeans in the spring, topping the record high set in 2017 at 90.2 million.
Corn plantings should also rise, to 91.0 million acres, up from 90.4 million for 2017-18 but down from 94.0 million in 2016-17.
The government projected combined plantings of eight major U.S. crops for 2018 at 253.7 million acres, up from 252.3 million a year earlier. The USDA predicted year-on-year increases for sorghum, barley, oats and rice, and declines for wheat and upland cotton.
“The USDA, I think, is saying here that as long as we are operating above (the) variable cost of production, farmers are not going to be setting land aside. They are going to be going full-throated in terms of land usage next year,” said Rich Feltes, vice president for research with R.J. O’Brien.
The forecasts are developed by consensus within the USDA on a long-term scenario for the agricultural sector for the next decade. The government will release its complete report on projections for the next 10 years in February.
The USDA projected U.S. corn production for the 2018-19 marketing year that begins Sept. 1, 2018, at 14.520 billion bushels based on a yield of 173.5 bushels per acre.
The government projected that 2018-19 corn ending stocks would grow to 2.607 billion bushels, from 2.487 billion at the end of 2017-18.
Robust demand for corn-based ethanol and the prospect of China resuming corn imports could trim that surplus, said Dan Cekander, president of DC Analysis.
“USDA’s corn-for-ethanol projections appear conservative. On the demand side, I think there are going to be more aggressive numbers coming,” Cekander said.
For soybeans, the USDA forecast 2018-19 production at 4.360 billion bushels with a yield of 48.4 bushels per acre. In contrast to corn, the government projected that 2018-19 soybean ending stocks would tighten to 376 million bushels, from 425 million at the end of 2017-18.
“I thought it was interesting, showing a carry-out below 400 (million bushels). It’s the way the market has been trading, with (CBOT) beans trying to gain on corn,” Cekander added.
The USDA projected U.S. all-wheat plantings for 2018-19 at 45.0 million acres, down from 46.0 million in 2017-18 and, if realized, the lowest in records dating to 1919.
The USDA projected 2018-19 plantings of upland cotton at 11.2 million acres, down from 12.4 million in 2017-18, and forecast upland cotton production at 17.4 million bales, down from 20.650 million the previous year.
Reporting by Julie Ingwersen; Editing by Dan Grebler and Leslie Adler