The first hectares of corn are already in American soil. Before the season really starts, the big gambling starts. What will the areas of grain maize and soybeans do in the country? That gives the market taste. Sowing is sowing and that also applies to determining an area. The big uncertainty for the Americans this year is Mexico. It keeps people busy.
Website Agrimoney asked market insiders for their opinion. What will the maize and soybean acreage do in the United States this year? Regardless of the interest of the interviewee, they are all in the same range. Between 90 and 93 million acres of corn. Converted 36 to 38 million hectares. Anyone who achieves a good yield can achieve a positive return – even at current crop prices. Alternatives are not available.
Huge stocks, low prices and reduced demand from Mexico are creating a sentiment in the market that takes into account a declining acreage of maize. Insiders usually see it differently. There is more to do about the acreage of soybeans. Opinions differ somewhat. In theory, according to the University of Illinois, a growth of 6 to 7 million acres is possible. The practice will probably turn out differently. Somewhere between 87 and 90 million acres (35 to 36 million acres). The yield per hectare is on average slightly in favor of soy. This means that the crop needs less input.
Other factors that play a role are the areas of cotton and rapeseed. Both are on the rise in the US, it is thought. Just three times since 1996, US soybean acreage has grown by more than 4 million acres in one season.
One major factor of uncertainty, which hangs like a dark cloud over the arable sector, is the issue of Mexico. The reason for this is President Trump's anti-Mexico policy. The Mexican agriculture minister has now indicated that it is investigating whether maize from Argentina and Brazil can be imported. Traders are also already targeting South America. It is usually more expensive than corn from the US. That means a bitter pill for farmers on the plains.
Neighboring Mexico buys almost the entire supply of corn from the US. In the 2015-2016 season, until September 1, good for 13,6 million tons. 28 percent of all corn exports go to the US, writes Reuters. The price of corn in the US is around 190 dollars per ton. Importing from South America costs 10 to 15 dollars more. The price difference ultimately determines whether Mexicans choose honor over their wallet.
Many farmers in the Midwest have voted for Trump in the hopes that he will also bring good to agriculture. The president's fledgling policies, however, have the potential to wreak havoc on exports, leaving many people in the agricultural sector concerned. For example, he canceled the Trans-Pacific Partnership deal. Trump also suggested revising the Free Trade Agreement with Canada and Mexico. According to exporters, exports to both countries have quadrupled in the last two decades. The US Grains Council has since expressed its concerns. On Thursday, the USDA will release its 2017 arable acreage forecast.
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