Corn farmers in some areas in the US may switch to planting soybeans this season as the weather has turned unfavorable for corn planting but will still suit the needs of the soybean crop, sources said.
The impact on the market would likely be limited as the switch to soybeans from corn is expected in Southeast US, northwestern Midwest, and parts of the Delta, but not in the main corn belt of the US, according to sources. The corn belt of the US includes Iowa, Illinois, Indiana, Nebraska, Ohio, among others.
However, estimates vary on how much of the corn acreage might shift to soybeans.
While Chief Commodities Economist at INTL FCStone Arlan Suderman said that up to 3 million acres of land under corn could potentially shift to soybeans, a Chicago based analyst expects the switch to be nearly 1 million acres, mostly in the Southeast US.
Senior Commodity Analyst with Chicago-based brokerage firm, Futures International, Terry Reilley, said nearly 1.06 million acres under corn are likely to move to soybeans in areas such as Georgia, Mississippi, Carolina, but not in the predominantly corn-producing regions.
CROP SCHEDULE
Usually corn planting in the US starts in mid-April and continues till June, but this has been delayed this year due to the fields being too wet as a result of floods followed by heavy snowfall in the major growing areas. Soybean sowing typically begins later than corn in late May-early June.
If corn is planted two weeks behind schedule, the harvest will be two weeks later. Therefore, many farmers will switch to soybeans because the growing window is shorter, Reilly said.
In addition, the greater concern is if a crop is delayed by a few weeks, it also runs the risk of crop damage, he said.
According to Prospective Plantings report, which was released by the USDA in March, farmers in the US intend to plant 92.8 million acres of corn in 2019, up 4% from last year, and the highest planted acreage since 2016.
For soybeans, the USDA expects the planted area to be at 84.6 million acres in 2019, down 5% from last year.
S&P Global Platts Analytics puts the likely corn acreage lower than USDA at around 91.5 million-92 million acres.
The difference may either be used for soybean planting or for no crop at all, Platts Analytics said, adding that it was too early to predict a crop switch.
Extensive flooding in the Midwest during mid-March may force corn producers to switch to crops with shorter growing seasons or soil moisture requirements, the US Department of Agriculture said in its grain feed outlook report released earlier this month.
Floods in March increased soil moisture, delaying planting of corn in the Midwestern US. The region had unusually heavy snowfall soon after. Now, with the rising temperatures, the snow is melting and is adding water to the already saturated fields, Maxar meteorologist Christopher Hyde said.
IMPACT ON CORN YIELDS
The delay in planting of corn is also likely to affect yields this season, Reilly said.
"The yield this season can come in below average. We are taking the yields in this season to be at 179 bushels per acre in the affected areas in the southeast and the Midwest, lower than the 10-year trend of 181 bu/acre," he said.
"We may lower the yield prospects further if we continue to see planting delays," he added.
According to Hyde, temperatures are expected to rise above normal in the near term combined with seasonal to above normal precipitation, which is likely to push corn plantings beyond mid-May.
So far, 6% of corn planting in the US has been completed, which is behind the five-year average of 12%, according to crop progress report by USDA released Monday. Soybean planting has reached 1% so far, behind the five-year average of 2%. However, Platts Analytics expects progress to return to normal going forward
The USDA has forecast US corn yields of 176.4 bu/acre, marginally down from last year's 176.6.
Chicago Board of Trade July corn futures contract were trading at $3.58/ bu at around 1200 GMT, up 1 cent from the previous close, and the July soybean contract was at $8.69/ bu, down 3 cents.
