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Corn+Soybean Digest

More Soybean Acres Likely In '99

'My winter wheat seed sales were the smallest since I started my seed business in 1972," an Indiana customer told me in December. I'm sure I could have gotten the same report from seed companies throughout the eastern Corn Belt and southeastern U.S.

In fact, current projections predict winter wheat acres will be down 8-10% in 1999. That's less than 40 million planted acres. It's 5-6 million acres below last year's figure and about 8 million below 1997 acreage.

Where those acres will go is the question many seed companies, grain traders and analysts are asking. Is it possible that some won't get planted? Or, will hard red spring wheat acres increase to offset the reduction in winter wheat plantings?

Spring planting conditions, prices for new-crop cotton, and corn and soybean price expectations will all factor into how many corn and bean acres get planted this year.

At right are three acreage and supply-demand scenarios for soybeans in '99. Unless the national average yield falls below 34 bu/acre, look for ending stocks to increase.

Here are three indicators to watch: 1) USDA's planted-acreage report, to be released March 31. It will indicate if USDA is going to reduce its estimate of total crop acres planted this year.

Remember that current estimates show urban development takes away 800,000 to 1 million acres of cropland each year. USDA has reduced production and planted acreage to 1997 levels in recent reports.

2) The price level of new-crop futures. Currently, the new-crop soybean-to-corn price ratio of 2.3:1 suggests that more soybeans will be planted. If that ratio changes by April or May, planting intentions may change as well.

3) The weather. This probably is the most important indicator. Early spring planting tends to lead to more cotton and corn acreages. A late, wet spring could increase soybean plantings to even higher levels than projected.

Unless major weather problems develop, sell soybean contracts if there's a rally in November Chicago Board of Trade futures and they hit $6.

Supply/Demand Projections For Soybeans --'98-'99--'99-2000--'99-2000--'99-2000 Planted Acres--72.7--73.0--74.0--75.0 Harvested--71.6--71.9--72.9--73.8 Yield (bu/a)--38.6--34.0--38.0--40.0 Production--2,763--2,444--2,770--2,952 Carryin--200--375--375--375 Total Supply--2,968--2,820--3,145--3,330 Domestic Use--1,753--1,745--1,915--1,950 Exports--840--800--850--950 Total Use--2,593--2,953--2,765--2,880 Ending Stocks--375--275--388--450

*These numbers are in million bushels or million acres, except where marked. They may not add up because of rounding and netting out imports.

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