Grain Acres Slashed

U.S. farmers are cutting back on corn and soybean acreage this year, according to the U.S. Department of Agriculture’s annual Prospective Plantings report.

Disappointed by low prices, farmers are projected to reduce corn acreage by almost 2 million acres and soybeans by over 3 million acres, a move that could reduce production by almost 3% for those crops.

Most market watchers had been expecting a small decline in corn acreage and a moderate increase in soybean acreage, so this report caught many people off guard.

In response to the significantly lower projected production, soybeans exploded and dragged the rest of the grain markets higher. The value for this fall’s soybean crop, represented by the November futures contract, reached a contract high of $10.49 on Thursday afternoon. Meanwhile, December corn rose to $4.11 per bushel, nearing a seven-month high.

Some farmers planned to shift their acreage to more-lucrative cotton or spring wheat crops, but these last-minute rallies may encourage them to review the profitability of planting soybeans instead next month.