CHICAGO (Reuters) - U.S. farmers planted nearly 5 million fewer acres of corn this spring than estimated by the U.S. government in March, the biggest cut in 37 years, as the coronavirus pandemic roils demand for the crop.The drop in corn seedings, as well as an 11.1% cut in cotton plantings, accounted for the bulk of the U.S. Agriculture Department’s 7.2 million-acre reduction to its estimate of the amount of major crops seeded this spring.
Soybean plantings fell below market expectations, with export demand in focus due to uncertainty about purchases from China arising from trade tensions.
Both corn <0#C:> and soybean <0#S:> futures soared to multi-month highs after the closely watched report was released.
“We were planting into peak fear,” said Ted Seifried, chief ag market strategist of the Zaner Group. “There was poor pricing, poor outlook in the market ... some guys not able to get into the fields - and we were in the middle of the pandemic.”
The USDA pegged corn plantings at 92.006 million acres, down from its March outlook for 96.990 million. Analysts had been expecting the report to show corn acres at 95.207 million, according to the average of estimates given in a Reuters poll.
Demand for corn-based ethanol fuel dropped sharply during the spring as drivers stayed at home during lockdowns, making corn less appealing to farmers.
The drop in corn seedings was the biggest between the March intentions and actual plantings since 1983, when farmers seeded 9.362 million acres less than they had planned.
“It would suggest that farmers - as their finances are tightening up - were more conservative than normal in planting this year’s crops,” said Arlan Suderman, chief commodities economist for StoneX.
Soybean acreage was seen at 83.825 million compared with 83.510 million in March. Analysts had been expecting 84.716 million acres of soybeans.
Reporting by Mark Weinraub; Additional reporting by P.J. Huffstutter and Tom Polansek; Editing by Chizu Nomiyama and Steve Orlofsky