The U.S. Department of Agriculture reported Friday that soybean acreage is expected to rise 10 percent to 2.25 million acres.
It's a trend playing out in many states, with more than 1 billion bushels of surplus wheat in storage in the U.S.
According to the report, winter wheat acres seeded in the fall of 2016 are estimated at a record low 1.11 million, down 19 percent from a year ago. The higher/bearish USDA corn stocks, up 82 million bushels from average estimates above 8.5 billion bushels, were trumped by the lower/bullish planting intentions for corn, which were almost 1 million acres under average trade estimates of 90.9 million acres.
Producers intend to plant 10.1 million acres of soybeans in Iowa this year. Kansas is coming on strong as a cotton state, with growers there planning 56,000 acres, 75 percent more than was planted in the state a year ago and more than 3 times the cotton planted in 2015.
Friday's report is based on a survey of farmers and is the first indication for the year of planting intentions.
And with 90 million acres planted instead of 94 million, Davis said it would increase the likelihood that less ending stock to use is carried over into 2018.
"I don't know that it's enough, but it should be positive for prices", Davis said.
Compared with previous year, planted acreage intentions are up or unchanged in 27 of the 31 estimating states. Alabama growers plan 190,000 acres, or 9 percent more than past year.
In Nebraska, prospective soybean planted acres is estimated at 5.7 million acres, an increase from 5.2 million in 2016 and 5.3 million in 2015. Oil type varieties are expected to account for 380 thousand acres, down 40 percent from a year ago.
The Chicago Board of Trade most-active soybean contract has lost more than 7 percent in four consecutive weeks of decline. When you look at this report, the overall crops planted are down 2.3 million from a year ago.
Winter wheat acres were pegged by USDA at 32.7 million, down 9 percent from plantings done in the fall of 2015; including 23.8 million acres to the hard red winter wheat grown in South Dakota. On Friday, March 31, shortly after the USDA's report was released, Davis maintained his outlook. "It's a relief rally on corn and wheat today".
Soybeans stored totaled 1.73 billion bushels, up 13 percent from March 1, 2016.
The most active corn contract for May delivery rose 6.75 cents, or 1.89 percent, to 3.6425 dollars per bushel. Of the total, 590 million bushels are stored on farms, up 11 percent from a year ago.
Durum wheat stored totaled 52.8 million bushels, up 24 percent from March 1, 2016.