For the increase of sowing areas of corn and soybeans in the US will add pressure on prices

Ministry of agriculture, the USDA released its first forecast of sowing areas of soybeans, corn and wheat in 2020/21 year in which the expected 12% jump in acreage of soybeans, in the hopes of farmers for rising prices and growing demand from China.

the acreage of corn will increase by 5% to 94 million acres (38 million hectares), compared to 89,7 million acres(36,3 ha) in 2019 against the best weather conditions and the current price futures, which show the advantage of planting corn over soybeans.

as for wheat, the forecast of the sowing this year is expected to remain broadly unchanged at 45 million acres (18.2 million hectares) vs 45.2 million acres last year.

All the projections USDA has surpassed the expectations of analysts who forecast on average, according to surveys: 93.6 million acres of corn, of 84.6 million acres of soybeans and 44.9 million acres of wheat.

"the Area of corn and soybeans, is likely to grow in 2019 on the basis of price signals that we have seen... Weather conditions will likely be better in comparison with the 2019 year," said USDA chief economist Robert Johansson during the presentation at the annual agricultural forum held on February 20-21 in the United States.

In 2019, the acreage under different crops decreased by 16 million acres through heavy rains during the optimal sowing time, the projected area of 85 million soybean acres will continue to be lower than in 2018, when total area reached 89.2 million, and significantly below 2017, when it reached 90,2 million acres.

the Local price level for both cultures is likely to lead to an increase in soybean crops in the upper Midwest and an increase in corn planting in the Eastern corn belt and South-Eastern United States, as local demand and transportation costs determine a regional solution at sowing.

the USDA experts Also predict a rise in the average price of soybean in 2020 by 5 cents to $8,80 per bushel or 323$/t, while the average price of corn will decline by 6% to $3.6 per bushel or 141.7 per$/t due to the increase in acreage of corn and the return level of the crop to normal around 370 million tons.

it is Expected that the average price of wheat in the U.S. will grow by 8% yoy to $4.9 per bushel, or 180$ / t due to the reduction of ending stocks.