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USDA 2018 Forecasts See Soy Ending 35 Years of Corn Dominance
By Julie Ingwersen
ARLINGTON, Va., Feb 22 (Reuters) - U.S. farmers will plant the same amount of soybeans and corn this spring, the U.S. Department of Agriculture projected on Thursday, potentially marking the first time since 1983 that corn has not been the nation's top crop.
Soybeans have gained favor among U.S. farmers as rising global demand, especially from China, the world's biggest soy consumer, has made the oilseed more profitable to grow. The United States is the world's biggest corn producer and exporter, and the No. 2 soybean exporter after Brazil.
The USDA at its annual outlook conference projected U.S. soybean plantings for 2018 at 90.0 million acres (36.4 million hectares), down from 90.1 million last year. The government put 2018 corn plantings at 90.0 million acres as well, down from 90.2 million in 2017.
Corn has been the most widely-planted U.S. crop since 1983. That year, soybean acres surpassed corn due to government intervention through a program designed to shrink high corn inventories at the time by paying farmers to leave fields idle that would otherwise have been planted with corn.
The USDA forecast U.S. wheat plantings for 2018 at 46.5 million acres, up from 46.0 million a year earlier.
A Reuters poll of analysts showed the market consensus for soy plantings topping corn plantings, because more money can be made from planting soy. Analysts estimated that soybean plantings would rise to 90.6 million acres and corn seedings would drop to 89.9 million acres.
The price ratio between new-crop November soybean futures and December corn futures on the Chicago Board of Trade is near 2.6-to-1, high enough to encourage farmers to plant more soybeans than corn.
Soybeans are generally less expensive to plant than corn, which requires more fertilizer, although corn yields more bushels per acre.
If the soybean to corn ratio holds, the 2018 soybean area could be 0.5-1.0 million acres above the USDA's 90.0 million, said Terry Reilly, senior analyst with Futures International.
The USDA is scheduled to release an annual planting intentions report, based on a survey of producers, on March 29.
U.S. farmers have seen incomes fall due to several years of global oversupply in grains markets. Banks that finance agriculture prefer farmers to plant soybeans due to the lower cost, and the potential for higher returns.
"The farm economy is still struggling, and soybeans are a 'low-cost' crop to plant, cutting producer risk, and more importantly, the banker risk," said Dale Durchholz, senior market analyst with AgriVisor.
The USDA projected the average 2018 price for corn at $3.40 per bushel, up from $3.30 in 2017; the average soybean price at $9.25 a bushel, down from $9.30 last year, and the average wheat price at $4.70 a bushel, up from $4.60.
In Illinois, the top U.S. soy producer and No. 2 corn grower, soybeans have been more profitable than corn every year since 2012, according to University of Illinois agricultural economist Gary Schnitkey. (Reporting by Julie Ingwersen; editing by Simon Webb and Marguerita Choy)
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