published Mar 29, 2018, 11:00:01 AM, by Alan Bjerga and Megan Durisin
(Bloomberg) —

Soybean acreage in the U.S. this year will exceed corn plantings for the first time in 35 years, according to a government survey, suggesting American farmers remain undeterred by possible Chinese trade sanctions.

Soybeans will cover 89 million acres in 2018, while corn may be planted on 88 million acres, the U.S. Department of Agriculture said Thursday in a report in Washington. Plantings for both will decline from a year ago, with USDA forecasts for each below the lowest prediction in a Bloomberg survey of analysts. The government’s spring-wheat estimate topped all forecasts, with an expected 12.6 million acres, up 15 percent from last year.

The planting estimates are the USDA’s first forecast of the year based on farmer surveys. With seeding a few weeks away in most Midwestern states, price swings and weather can spur changes in the outlook. In February, the agency projected corn and soybeans would each cover 90 million acres.

Last year, U.S. farmers planted 90.2 million acres of corn and 90.1 million acres of soybeans.

In a separate report released Thursday, the USDA pegged corn held in inventories as of March 1 at 8.89 billion bushels and soybeans at 2.11 billion bushels, both records for that date and above the average analyst forecasts.

Soybean futures have risen as much as 12 percent, supported by a prolonged drought in Argentina, the top exporter of soybean meal used in livestock feed. While corn has also rallied, the acreage projections signal that farmers are more optimistic about oilseed earnings.

The USDA survey comes at a time of rising trade tensions and heightened anxiety for U.S. soybean farmers. China is said to be studying the potential impact of trade restrictions on the commodity, people familiar with the matter said in February. An editorial published last week in a newspaper affiliated with China’s ruling Communist Party criticized alleged dumping of U.S. production.

Still, the commodity wasn’t included on a Chinese list last week of products that will face new tariffs, unlike U.S. imports of pork. Analysts at Citigroup Inc. and JPMorgan Chase & Co. have said this week that China probably won’t impose tariffs on U.S. soybeans.

U.S. soybean production was valued at $40.9 billion in 2016, according to the American Soybean Association. Chinese demand has grown in importance for exporters: The nation’s purchases have more than doubled in the past decade, bolstered by an expanding hog herd and pork consumption.

The only other time that soybean planting topped corn was in 1983, near the beginning of a farm crisis that culminated in relief efforts such as Farm Aid. Faced with a wave of foreclosures in rural America, the government discouraged corn growing to help ease a grain glut.

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