March 19, 2008

Survey shows US growers to plant less corn, more soy in 2008

US producers in 2008 will plant 87.7 million acres of corn, down from 93.6 million last year, as they shift more land to soy and spring wheat, according to a survey released Tuesday (March 18, 2008).

This means a drop of 6.3 percent for corn acreage at a time of rising ethanol capacities.

Farmers intend to seed 71.8 million acres of soy this spring, up 13 percent from 63.6 million last year, the survey from Farm Futures magazine said.

Spring wheat acres will rise to 14.3 million, up 1 million or 7.5 percent from 2007, while all-wheat plantings should hit 63.9 million acres, compared to 60.4 million last year, up 5.4 percent.

Market signals are telling producers to shift acres into soy from corn due to tight projected soy ending stocks, Farm Futures said. However, a drop of nearly 6 million acres of corn is "more than that market can allow to happen," said Arlan Suderman, analyst for the magazine.

"A drop of that magnitude would require significant price rationing of demand to prevent the corn pipeline from running dry, even if trend yields are achieved," Suderman said. "The market truly has more work to do in the weeks ahead. Look for a long and volatile growing season in the commodity markets with wide price swings becoming the norm until supply and demand are brought into balance."

Farm Futures said it surveyed 974 growers by e-mail from Feb. 28 to March 14. A survey released by the magazine in December put corn plantings at 88 million and soybean plantings at 69.5 million acres.

"Since then the ratio of soy to corn prices increased from 2.35 to 1 to over 2.50 to 1," the magazine said.

The USDA will release its planting projections March 31. At its outlook forum in February, the USDA estimated 2008-09 corn plantings at 90 million acres, soy plantings at 71 million and all-wheat plantings at 64 million.