USDA on Thursday predicted U.S. farmers this year will plant 93.6 million acres of corn, the most since the 2013 crop, and 2 million to 3 million more than what crop experts expected.

An increase in corn acreage had been expected as it was believed the crop offered better returns than soybeans, but that outlook could change as corn prices dropped sharply following the report.

USDA forecast farmers will plant 82.2 million acres of soybeans, the least since 2013, but an area that was close to trade forecasts. Wheat acreage was put at 49.6 million is down from 2015’s 54.6 million.

USDA on Thursday predicted U.S. farmers this year will plant 93.6 million acres of corn, the most since the 2013 crop. (Photo: Fuse/Thinkstock)

“There is really only one number that matters in today’s report, USDA’s shockingly large corn acreage estimate,” said Bryce Knorr, Farm Futures senior grain analyst. “At 93.601 million, the agency’s estimate is 2.6 million above the highest estimate in the trade. In addition to gains across the “three I” states, the report suggests cuts in sorghum and wheat will go into corn.”

“This brings the March rally to an abrupt end. Rallies now depend on growing season weather, which will take a while to play out,” he said.

 Chicago corn futures traded about 14 cents lower near midday on Thursday, while soybeans futures were about unchanged. While the soybean acres were close to those found in the Farm Futures’ survey, large old-crop supplies will limit rally potential “until growing-season weather becomes an issue,” said Knorr.

“The real surprise is again corn. Our farmer survey showed growers not planting some ground due to low profit potential. But the government found growers willing to roll the dice, despite corn’s higher production cost,” said Knorr.

Wheat futures held modest gains with the largest gains being spring wheat. USDA put spring wheat acres at 11.3 million, down 14% from 2015, and durum acres at 2 million, up 3%.

“Wheat (prices) will get a little support from the cut in spring wheat seedings, but it will be hard to rally prices much without growing season troubles around the world. But the market is doing its job, pushing some ground out of production and forcing growers out of the least profitable crops,” said Knorr.

More corn acres had been expected as the crop appeared to offer better returns than soybeans, helped by lower fuel and fertilizer prices. At its annual outlook forum in February, USDA had forecast corn acres at 90 million, soybeans at 82.5 million and total wheat at 51 million.

The grain stocks report released on Thursday were above year-ago levels for corn, soybeans and wheat due in part to a slowdown in exports for the three crops. The numbers were close to trade forecasts.

Corn stocks as of March 1 were nearly 7.81 billion versus 2015’s 7.75 billion, soybeans were at 1.53 billion versus 2015’s 1.33 billion and wheat was at 1.37 billion versus 2015’s 1.14 billion.