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High inputs costs dampen U.S. corn plantings – USDA

U.S. farmers will pare corn plantings by 1.5% and modestly increase soybean acreage this spring in the face of high input costs, projected the USDA on Thursday. High yields would bring the largest corn and soybean crops ever in America and pull down season-average prices for the two most widely planted U.S. crops.

On the opening day of its Agricultural Outlook Forum, the USDA said corn plantings would total 92 million acres, down by 1.4 million acres from 2020, and soybean plantings of 88 million acres, an increase of 800,000 acres. With normal weather, the corn crop, at 181 bushels an acre, would be a record 15.24 billion bushels and soybeans a record 4.49 billion bushels, with yields of 51.5 bushels an acre.

“Shifts in relative prices and higher input costs support a year-to-year decrease in corn plantings, although the decline is moderated by the highest projected corn price for crop insurance purposes in over a decade,” said USDA analysts. “Soybean area is forecast to increase as strong U.S. crush demand and the current drought in South America has resulted in very favorable new-crop pricing opportunities for producers. In addition, soybean plantings are expected to benefit as farmers focus on managing high production costs.”

Farm-gate prices were projected at $5 a bushel for this year’s corn crop and $12.75 a bushel for soybeans. The corn price would be 45¢ lower and soybeans 25¢ lower than the season-average price for 2021 crops.

Rising demand for biofuel feedstocks is driving up soy oil prices and will boost soybean crushings to a record 2.25 billion bushels for the 2022 crop. “Competition for biofuel feedstocks as new renewable diesel producers enter the market will support soybean oil prices and lead to lower soybean oil for methyl ester and food, feed, and other industrial use,” said USDA. It estimated that 12 billion pounds of soy oil – 46% of 2022/23 production – would be used in biofuels, compared with 11 billion pounds this marketing year and 8.85 billion pounds in 2020/21.

Wheat production was projected at 1.94 billion bushels, up 18% from last year but still below the five-year average. The season-average price was projected at $6.80 a bushel, down by 50¢ from the 2021/22 average. Winter wheat seedings are up by 2% from last year. “Combined spring and durum wheat plantings for 2022/23 are also projected higher although constrained by favorable prices for alternatives beyond corn and soybeans in the Northern Plains, including minor oilseeds, other small grains, and pulses,” said USDA. It pegged all wheat plantings at 48 million acres, compared with 46.7 million last year.

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