February 19, 2010

US corn plantings seen at 89 million acres

The USDA now expects American farmers to plant 89 million acres of corn and 77 million acres of soy in 2010, Chief Economist Joseph Glauber said Thursday (Feb 18).

Glauber, speaking at the USDA's two-day, annual Agricultural Outlook Forum, said wheat plantings were seen at 53.8 million acres, while rice acreage was estimated at 3.2 million.

Total planted area for the eight major field crops will be 247.3 million acres, he said. The eight major crops are corn, sorghum, barley, oats, wheat, rice, cotton and soy.

"The net return outlook is much less favourable than it was two years ago," Glauber said, noting that prices are off record highs.

Still, Glauber said that given record crops and a global recession, it is surprising prices have held up as well as they have.

Glauber said the lower soy acreage outlook, down 500,000 from 2009, is due to improved returns for corn and "rotational considerations." Most farmers alternate crops from year-to-year between corn and soy.

In its long-range, or baseline projections issued earlier this month, the USDA had projected 88 million acres of corn and 76.5 million acres of soy. Those projections were compiled in November 2009.

Glauber said the 2010 corn crop was projected at 13.2 billion bushels, slightly bigger than the 2009 crop and up from the baseline projection of 12.96 billion. He said higher acreage would "more than offset the return to trend yield."

Ethanol production will continue to be a major driver of the corn market, with an estimated 4.5 billion bushels of corn used in 2010. That is up 200,000 from 2009 and up from the baseline projection of 4.4 million.

"However, the rapid increase we saw in ethanol production over the last four years will slow somewhat," he said.

Glauber said corn exports would be up 5% as global livestock production rebounds, but that US exporters would remain under pressure from large world wheat supplies and feed-quality wheat.

US soy production in 2010 is projected at 3.26 billion bushels, up slightly from the baseline projection of 3.23 billion but still 100 million bushels below last year.

Soy exports for 2010 are projected at 1.325 billion bushels, up slightly from baseline projection of 1.3 billion bushels, but down 5% from last year.

Soy crush is projected at 1.65 billion bushels, down from the baseline projection of 1.68 billion. Soy is crushed to produce soyoil and soymeal.

Thanks in part to large South American supplies, 2009-10 world soy ending stocks were projected at 71 million tonnes, up 31% from the prior year and the second-highest on record, Glauber said.