After consecutive soybean production records in the United States, North American producers are now willing to significantly increase corn acreage next year. This is according to an estimate from the think tank FAPRI (Food and Agriculture Policy Research Institute) at the University of Missouri.
For the head of the think tank, Patt Westhoff, the equation is very simple: “The future outlook for the [financial] return on corn has improved a lot compared to soybeans.” The research institution's estimate is that the corn surface will reach 37.3 million hectares, which would be 930 thousand hectares more than in the current harvest. The soybean harvest would fall to 34.8 million hectares – almost one million hectares less than in 2017.
According to Westhoff, futures prices supported corn more at the beginning of the Northern Hemisphere winter than when they finished preparations for spring planting and fertilizer prices are lower than they were a year ago. FAPRI also adds that a rotation cycle from soybeans to corn is necessary.
The think tank's projection is that the price of soybeans will fall by more than 40 cents compared to current levels. For comparison purposes, the USDA (United States Department of Agriculture) also predicts a drop, but not as severe. “The final size of this year’s crop, evolving demand conditions, and more will affect grower expectations for 2018 returns,” concluded Westhoff.
Source: Agrolink
