Bigger US corn acreage seen this year

 

 

US farmers, encouraged by lower fertiliser costs, will plant more acres to corn this spring than a year ago, while soy seedings will remain around the same as in 2009, according to  grain analysts.

 

US 2010 corn plantings were projected at 89.3-91 million acres and soy at 76.5-78.7 million acres. Last year, US farmers produced record corn and soy crops based on planted acreage of 86.5 million corn acres and 77.5 million soy acres.

 

Corn and soy prices on the CBOT, spring weather, and shifting yield potential for both crops will as usual drive final farmer decisions on how many acres they will seed to corn and soy, the two largest row crops.

 

Rich Feltes, senior vice president of MF Global Research, said estimated US corn seedings at 89.75 million acres and soy at 78 million, based on current conditions.

 

At its annual outlook forum in February, the USDA projected 2010 corn seedings at 89.0 million acres and soy at 77.0 million.

 

But the USDA's first estimate of US corn and soy seedings based on actual farmer surveys will be released on March 31. Until then, trade speculation about USDA's planting forecast will affect CBOT grain markets.

 

The world grain trade uses the March plantings numbers and then historical yields until the August field surveys to project annual corn and soy production from the United States, the world's single largest exporter of the key grains.

 

The 2009 US planting season was plagued by cold, wet weather -- preventing some farmers from seeding all their intended acres. Though some northern Midwest rivers were near flood stage this week due to a quick snow melt, the analysts said precipitation for March is actually normal.

 

Analysts also said they expected CBOT prices for new-crop corn, soy and wheat to trend lower for the spring-summer period, provided Mother Nature cooperates.

 

Analysts pegged key support for December corn at US$3.50-3.80 a bushel, versus Tuesday's close at US$3.96-3/4. November soy support was pegged US$8.50, down from US$9.26 on Tuesday and December wheat at US$4.75-5 compared with US$5.42-3/4.

 

Analysts said the government's expected decision to boost the level of ethanol in gasoline to 15% from 10% was important but not expected until the summer - too late for spring planting decisions. The move is also likely to face court battles from gasoline dealers and automakers over product liability issues.