The corn market is calling for more acres this year and CoBank expects American farmers to deliver.
One of the largest private providers of credit to the US rural economy, CoBank on Thursday forecast US producers will plant 94.5 million acres to corn in the spring, a 4.2% increase from a year earlier. On the other hand, soybean acres are projected by CoBank to fall 3.6% to 84 million, while spring wheat acres across the northern Plains are estimated to decline 5.9% to 10 million.
“US farmers are projected to shift acreage to corn this spring as corn prices maintain an impressive run while prices for competing crops struggle to keep pace,” CoBank said.
Corn futures earlier this week hit a 16-month high (see March futures chart below), and the soybean-corn ratio – an indicator of corn versus profitability – currently stands at about 2.2. Anything below 2.5 typically suggests more acreage will be devoted to corn, so the ratio today is strongly hinting at more corn. The ratio back in early November stood at 2.35.
"While farmers tend to stick to historical crop rotations for agronomic reasons and market diversification, corn's price rally relative to other crops suggests a major shift in acreage is in the offing,” said Tanner Ehmke, grains and oilseeds economist with CoBank. "We're still several weeks away from the start of planting season, which means the acreage balance is still in flux. Multiple factors could shift how acres are traded around the US, but the current price environment suggests corn will be king in 2025.”
Notably, low hay prices are expected to shift acres out of corn harvested for silage to corn harvested for grain, raising the corn-for-grain harvested acreage by 5% to 87.06 million.
However, CoBank also warned the potential for trade disputes with Canada and Mexico could significantly weaken the demand for US corn and curb the increase in planted acreage. A trade war with Canada may throttle exports of U.S. ethanol, while a disruption to the Mexican market could severely impact U.S. corn exports, it said.
CoBank projects total U.S. planted acreage for crops based on statistical regression analysis and information from grain cooperatives and merchandisers across the US.
The USDA will release early new-crop acreage and supply-demand projections at its annual Agricultural Outlook Forum next week. The USDA’s prospective plantings report will be released March 31.
March corn: source – Barchart
