US corn acreage should be little changed in the 2021-22 marketing year (September-August), while acres under soybean may see a substantial expansion due to a rise in prices and a bigger drop in year-end stocks, analysts said.
Although, fundamentals were supportive of higher planting of corn as well, most analysts said soybean will likely be the 'acreage winner' as corn prices and fundamentals were less appealing than those for soybeans.
The December 2021 futures ratio for corn and soybeans -- at 2.5:1 was considered neutral but with a slight bias for soybean, analysts said.
In the US, corn and soybean are planted almost at the same time -- corn planting typically begins in April-May, with soybean planting in May-June.
According to Steve Pitstick, a corn and soybean farmer from Illinois: "In 2021 there can be possibly a good battle for acres between corn and soybean."
Estimates
Arlan Suderman, chief commodities economist with StoneX Group, estimated corn acreage in 2021-22 to be at 92 million acres, with possibly 89 million acres under soybean.
Terry Reilly, senior analyst with Futures International saw 91 million acres of corn and 89 million acres of soybeans.
If realized, 89 million soybean acres in 2021 will be up from the current year's 83.1 million acres, while for corn it will be a rise of 1 million acres, based on an estimate of 92 million acres.
Stephen Nicholson, President of Rabo Agrifinance, said he did not have estimates yet but expected soybean acres to see a bigger rise in 2021.
Teucrium corn fund's Sal Gilbertie also said corn prices will have to rise to motivate farmers to plant more. "At current prices, the ratio favors soybean", Gilbertie said.
Peter Meyer, head of grains and oilseed analytics at S&P Global Platts Analytics, expected corn acres to see a significant jump to 95 million acres, and soybean acres to rise to 86 million.
Possible tightness in global corn markets due to concerns of reduction in corn output from Argentina Brazil and Ukraine is likely to incentivize planting of corn over soybeans in the US, Meyer said.
"US farmers love to plant corn and they will again if the market can hold these levels but we are talking about something that is 4-5 months away. We have already spoken to farmers on their 2021 intentions and they favor corn but they also know it could be a long winter with COVID-19."
Prices and other factors
In the latest World Agricultural Supply and Demand Estimates report, the US Department of Agriculture estimated season average farm price for corn in 2020-21 to be at $3.6/bushels, 40 cents/bushel higher than seen in June. Farm price for soybean, however, has seen a sharper jump of $1.6/bushel during the period to $9.8/bushel.
On the Chicago Board of Trade, the most active corn contract has risen nearly 80 cents over the past three months, while the front-month soybean contract saw a gain of around $2/bushel.
Acreage and production numbers fell from their previous estimates for both corn and soybean, supporting price firmness. However, major strength to both soybean and corn prices came from unprecedented demand from China and dwindling year-end stocks.
China has booked a record 10.5 million mt of corn for the 2020-21 marketing year, almost double than the previous high. Markets were waiting to find out whether China will increase its tariff rate quota for corn imports, which stand at 7.2 million mt.
As for soybeans, export inspection volumes as of week ended Oct. 22, were seen at 14.34 million mt, with majority of the shipment destined to China. China is typically a major buyer of US soybean, and the country's imports in 2020-21 marketing year is forecast to touch an all-time high 100 million mt.
Year-end stocks forecasts for both soybeans were lowered by the USDA. In its October WASDE report, USDA lowered soybean year-end stocks to 290 million bushels from 395 million bushels in June, while corn stocks also dropped to 2.17 billion bushels from 3.323 billion bushels in June.
