February 24, 2012

 

US to raise major grain crop plantings to 14-year high

 

 

US farmers will expand the sown area of major crops this year to a new record level since the 1990s, US farm officials said, increasing estimates for cotton, soy and wheat seedings.

 

The USDA pegged at 254.4 million acres its forecast for the area seeded to the eight main crops, which also include barley oats and rice, the highest since 1998.

 

The figure, which matched that achieved in 2000, was up 3.2 million acres on an initial figure released last week, but based on November calculations.

 

And it reflected a drop in land area signed up for conservation projects, and a scramble by farmers to cash in on prices which, for many crops, will come in at historically high levels, if potentially down on 2011.

 

"Expected returns for soybeans and corn are against historically high, reflecting strong new-crop futures and cash forward prices," Joseph Glauber, USDA chief economist, said.

 

Indeed, the USDA lifted its forecasts, from last week, for prices farmers can expect to receive for rice, soy and wheat.

 

The USDA pegged at 94 million acres corn sowings this year, the highest figure since World War II, but the same as in last week's so-called baseline report, which gave long-term projections.

 

The rise in the total area reflecting in the main an upgrade for wheat, for which sowings were pegged at 58 million acres, 1.5 million acres higher than initially expected, and up 3.6 million acres on-year.

 

"Spring wheat plantings should rebound from last year's levels, when excessive spring and early summer wetness limited seedings," Glauber said.

 

The estimate for soy sowings was lifted by one million acres to 75 million acres, above market forecasts, with upland cotton plantings pegged at 13 million acres, also one million acres higher than the baseline figure.

 

On prices, the USDA stuck by a belief that values of "most field crops will be lower" in 2012-13, "reflecting larger world and domestic supplies".

 

Farmgate corn prices will fall "significantly" to US$5.00 a bushel, with cotton values also setting a three-year low, of US$0.80 a pound, "reflecting larger supplies worldwide".

 

However, the USDA trimmed expectations for falls in soy and wheat prices from those outlined last week.

 

"Clearly the government is looking at larger ending stocks on corn and smaller stocks on soybeans," broker US Commodities said.

 

The USDA will unveil more extensive crop forecasts, including stocks estimates, later in its two-day conference.

 

It upgraded the estimate for rice prices that farmers will receive to a four-year high of US$14.70 a bushel, thanks to "strong world demand which will likely boost US rice exports".

 

Competition on international rice markets has been weakened by a state stockpiling scheme launched by Thailand, historically the top exporter.