CHICAGO (Reuters) - Struggling U.S. farmers are pressing their luck with soybeans this spring, sowing record acreage even though the world is awash with the oilseed, as demand from China offers a potential lifeline.

FILE PHOTO -- Ryan Roberts eats some of the soy beans in his field to check if they are ready for harvest in Minooka, Illinois, September 24, 2014. REUTERS/Jim Young/File Photo

Soybean plantings could surpass corn for the first time this year, with rising exports holding up prices and providing a narrow path to profitability for U.S. farmers facing their fourth straight year of declining incomes.

But fierce competition to supply China threatens the bottom line for U.S. growers, and 2017 prices, while seen as up slightly from 2016, are still projected to be 50 cents per bushel lower than three years ago.

Diplomatic concerns also weigh heavily as the market eyes tense relations between the two countries. U.S. President Donald Trump and China’s leader Xi Jinping meet this week in Florida. Trump has said he wants U.S. companies to stop investing in China and instead create jobs at home. He has also accused China of manipulating its currency to boost exports.

Mike Jordan, a farmer from Beloit in north-central Kansas, plans to boost soy acreage by 10 percent after success both on the yield and price fronts for his crop in 2016.

“The general sentiment is ... even though Kansas is a wheat state, beans look pretty good,” Jordan said. “If you told me five years ago beans were going to produce more than half the total income on my farm, I would have wondered where you were coming from.”

PLANTING RECORDS

The U.S. Department of Agriculture (USDA) forecasts farmers will sow 89.482 million acres of soybeans this year, up 7.2 percent from the record 83.433 million acres in 2016. Corn acreage was seen falling to 89.996 million acres, just 514,000 greater than soybean intentions.

During the past decade, final soybean acreage has topped the March forecast by more than 500,000 acres five times, with the biggest gain in 2012, when plantings beat initial projections by 3.296 million acres. A year ago, final soybean plantings came in 1.197 million acres above March intentions.

Soybeans also are taking acreage from wheat, which has struggled on the export market. U.S. wheat plantings were seen falling to 46.059 million acres - the lowest since the government started tracking them in 1919.

The soybean crop is planted to be exported, part of its allure to farmers who see demand for wheat and corn declining on both the export and domestic fronts.

On average, 45 percent of the soybean crop has been exported during the past 10 years and the USDA projects that will rise above 50 percent in 2017/18. Corn is typically used for domestic feed or ethanol, with only about 14 percent exported.

The rising soy acreage is seeded with China in mind.

“With China, if we can keep them as a good customer ... I am hoping that they can soak up the extra supplies and keep the price from collapsing,” said Dave Newby, a farmer in Bondurant, Iowa, who plans to boost his soybean acreage by 50 percent this year.

China’s soybean imports have grown for 13 years in a row and the USDA expects them to hit 87 million tonnes in the year ending Sept. 1. That would soak up one-fourth of the world crop and represent a 130 percent surge in demand in the last decade.

The next-biggest importer is the European Union - set to bring in just 13.80 million tonnes in the 2016/17 crop year.

The United States sold 62 percent of its exports to China in 2016, worth more than $14 billion, according to the American Soybean Association. Soybean exports helped spur the U.S. economy to its biggest gains in two years during the third quarter of 2016.

SOUTH AMERICA STEPS UP

But growing Chinese demand does not guarantee a profit as stocks should be huge even after China satisfies its needs. Chicago Board of Trade November soybean futures, which track the crop to be harvested this autumn, have fallen 1.0 percent since the USDA issued its acreage outlook on March 31. CBOT December corn has risen 2.1 percent.

Additionally, massive crops in Brazil and Argentina provide China with purchasing options, and the competition is likely to persist as South American farmers also have the export market at the forefront of planting decisions.

“We plant soy in Brazil because there is global demand for the grain,” said Elso Pozzobon, a farmer in Mato Grosso, Brazil’s largest soy producing state. “This crop gives producers a sense of security.”

In Argentina, soybean acreage looks set to rise as an export tax that held back seedings is expected to decrease.

“Considering that world demand is still strong and prices are better than the alternatives,” said David Hughes, who farms thousands of hectares in Argentina’s bread basket Buenos Aires province. “I would guess we are probably at a low level of acreage limit.”