Soybean Prices Jump as U.S. Farmers to Plant Less Than Forecast

March 31 (Bloomberg) -- Soybean prices soared the most in five months after a government report showed farmers intend to plant fewer acres of the oilseed than analysts expected.

Soybean acres will rise 0.4 percent to a record 76.024 million from a year ago, the U.S. Department of Agriculture said today in a report. Analysts in a Bloomberg News survey forecast a 4.5 percent gain. Before today, soybean futures fell 29 percent in the past year as costs for fertilizer, seeds and farm machinery climbed.

“The soybean acreage is a major surprise,” and may indicate farmers intend to idle some marginal fields, said Chad Henderson, a market analyst for Prime Agricultural Consultants in Brookfield, Wisconsin. “Farmers are angry that they are paying 30 percent or more to plant crops that are down about 30 percent from a year ago.”

Soybean futures for May delivery rose 47.5 cents, or 5.3 percent, to $9.52 a bushel on the Chicago Board of Trade. The gain was the biggest for a most-active contract since Oct. 29.

This month, soybeans climbed 9.2 percent. In the quarter, the price declined 2.9 percent, the third straight drop.

Futures rose today as farmers said they intend to plant fewer peanuts, sunflowers and canola.

“Plantings of other U.S. oilseeds were down, so this is constructive” for price gains, Anne Frick, a senior oilseed analyst at Prudential Financial, said in a report.

The estimated reductions were 27 percent for peanuts, 18 percent for sunflowers and 15 percent for canola, the USDA said.

U.S. farmers said they intend to reduce acreage this year on the 13 major crops by 3.5 percent to 250.54 million, the lowest since 2006, USDA data show.

Fallow Land

“The increased input costs will cause farmers to let less- productive land lie fallow,” said Dan Cekander, a senior market analyst at Newedge USA LLC in Chicago. A rally of an additional 50 cents to $1 may spur growers to add acres, he said.

Soybean inventories on March 1 fell to the lowest since 2003 as China, the world’s biggest oilseed importer, increased purchases from the U.S., Frick of Prudential said. About 1.302 billion bushels were in storage, down 9.2 percent from a year ago, USDA data show. Analysts expected 1.327 billion.

The increased demand implies U.S. reserves before the harvest will fall to 180 million bushels from 185 million estimated earlier this month by the USDA, Frick said.

Corn is the biggest U.S. crop, valued at $47.4 billion in 2008, followed by soybeans at $27.4 billion, government figures show.