March 25, 2011
 

US corn planting survey results lower than expected

 

 

A national survey of 1,400 US farmers' spring planting plans by Farm Futures Magazine puts corn acreage this spring at 91.4 acres nationwide, an increase from 88 million last year but still short of the five million required to help rebuild tight domestic corn stocks.

 

The USDA will release its much anticipated planting plans report on March 31. The USDA said last month that its early approximations require a 92 million acre corn planting schedule this spring.

 

Corn prices have doubled in the last eight months as US local stocks have substantially decreased from 1.8 billion last May to a forecasted 675 million bushels by the end of this summer because of shorter crops in the US and Asia, and heavy export and ethanol demand.

 

The 675 million bushels of extra crops is a little more than a fortnight's supply and the lowest in the US since the mid-1990s.

 

End users like ethanol producers and livestock feeders have expressed concerns about corn shortages during the summer before the harvest comes in. The Goldman Sachs report warned that bad weather this summer, either flooding or extremely hot conditions during pollination in July, could shorten the US crop and raise prices as high as US$9/bushel.

 

Corn is being bought and sold in the US$6.80/bushel range this week on CBOT.

 

The Farm Futures report said that high production costs for corn and disappointing 2010 yields in some areas suggest corn growers remain reluctant to devote as much ground to the crop as expected.

 

Record wet weather later in the growing season during June and July last year slashed the nationwide corn yield from 164 bushels per acre in 2009 to 153 bushels last year and from 182 bushels per acre in Iowa in 2009 to 169 bushels per acre in 2010.

 

Corn is under threat in the so-called battle for acres by soy prices that have reached US$14/bushel this winter and record high cotton prices, which are enticing southern farmers to change from corn back to the mainstay crop of the Old South.

 

In Iowa, most farmers are reluctant to venture away from their normal corn/soy rotations, especially so with a 40% rise in the price of nitrogen that is critical for corn. Soy not only needs far less fertiliser but naturally adds nitrogen to soil during and after the growing season.

 

Arlan Suderman of Farm Futures described the situation as a very exceptional year in that prices have provided an enticement for all the crops to increase acres.

 

Producers are maximising use of their land resources while keeping up agronomic crop rotations.

 

The Chicago Mercantile Exchange, in its morning corn comment, said "Many traders see plantings near the 91.5-92 million acre level. If plantings total 92 million acres and the yield is 162.3 bushels per acre, ending stocks could come in around 905 million bushels, which would still be very tight and would result in a stocks/usage ratio of just 6.7 %, the third lowest in history."