US farmers favor corn, total grain acreage dips

US corn acreage is expected to rise during the 2019-20 season, despite a projected drop in total grain acres.

Overall grain area in 2019-20 is likely to fall by 4mn acres, or by 1pc, to 315.3mn acres from the 2018-19 season, according to the US Department of Agriculture (USDA). Declines in soybean, wheat and cotton acreage will more than offset a 4pc rise in planted corn area from the prior season.

US planted corn area is pegged at 92.7mn acres, outpacing industry and an earlier USDA estimate by 1.5mn acres and 800,000 acres, respectively. Corn acres are projected to rise across all major growing regions with the exception of the Southern Plains where farmers intend to plant 2.4mn acres, 3pc less than a year ago. Farmers in the Northern Plains are expected to raise corn area plantings by 8pc this season, sowing 25.4mn acres and gaining ground on the Corn Belt where plantings are slated at 26.1mn acres.

Domestic soybean area is forecast to fall by 5pc to 84.6mn acres from last year, undercutting industry estimates by 1.6mn acres, as farmers across all major growing regions curb soybean plantings amid ongoing trade disputes with China. In the main producing regions of the Northern Plains and Corn Belt, soybean acreage is expected to fall by 2pc to 16.6mn acres and 25.6mn acres, respectively.

US wheat acreage is estimated to decline by 4pc to 45.8mn acres from last year, the lowest planted wheat area since records began in 1919. Notable acreage declines in Kansas and Appalachia cut winter wheat planted area by 3pc to 31.5mn acres from 2018. Spring wheat area is pegged at 12.8mn acres, down 3pc from last year as declines in Minnesota, Montana and South Dakota more than offset North Dakota's 2pc rise in area.

Cotton area is projected to fall by 2pc to 13.8mn acres from last year, reflecting a 6pc decline in Texas cotton acreage to 7.3mn acres.

The USDA noted that the published planting intentions were based on farmer reports prior to the major flood events that impacted Nebraska, Iowa and Missouri during the second half of March. The agency said that "it will take time to determine what impact it has on final plantings."

Greater fertilizer consumption from the 3.6mn acre growth in corn acreage more than compensates for declines in planted area for soybean, wheat and cotton. Argus estimates US fertilizer consumption would rise by 1pc from 2018 under the USDA's projections. Actual fertilizer consumption will vary as farmers deal with persistently wet conditions during the application season that could potentially limit field access.

The influx of corn acres caused the overall amount of theoretical nitrogen use to rise by 2pc from the previous season to 8.28mn st. The consumption rates of phosphate and sulfur are both expected to marginally rise this season to 3.76mn st of P2O5 and 348,000st of sulfur, respectively. Estimated sulfur and phosphate usage represents a less than 1pc increase from last season.

The 4.5mn acre decline in soybean area is expected to curb potash usage by less than 1pc from the prior season to 4.1mn st of K2O.