April 1, 2013

 

 

US farmers in Minnesota are planning for the largest corn plantation in the nation's history this spring, hoping to exploit high prices after the drought in 2012.

 

Meanwhile, corn futures plunged US$0.40 a bushel, according to a March 28 report by the USDA.

 

"Somehow, we found 400 million more bushels of corn than we knew were there, and that's what tipped it," said Edward Usset, a grain marketing specialist at the University of Minnesota. "It was enough to make people feel pessimistic about corn, so the corn market went down."

 

The report marks the first official look at the 2013 growing season for corn, soy, wheat, oats and other staple crops. It is also obvious that much corn will be planted this year.

 

The USDA said that 97.3 million acres will be planted this spring, the most corn acreage since the 1930s. Minnesota, the nation's number four corn producing state, should see its highest corn plantation.

 

"The profitability of corn was just too hard to pass up for producers," said Brian Basting of Advance Trading.

 

Together, those USDA reports helped cool the feverish market for corn.

 

"The dynamics have changed," Basting said.

 

Usset noted that Minnesota farmers still hold huge stockpiles of corn. Some of the grains are already sold as farmers anticipate rising prices while grain buyers hope that prices will drop, he added.

 

Unlike a year ago, spring planting seems to be a distant possibility, with much cropland in Minnesota still blanketed by snow. At the same time, drought remains a concern after an extremely dry autumn.

 

In addition to corn, US soy acreage is expected to be 77.1 million acres, according to USDA. The fourth-highest on record for US spring wheat acreage is estimated at 12.1 million acres.

 

In Minnesota, along with nine million corn acres, growers expect to plant 6.8 million acres of soy and 1.3 million acres of spring wheat.

 

Last week, corn futures for the May contract fell to a maximum of US$0.40 daily trading limit in Chicago, closing at US$6.95 a bushel. Soy were down US$0.50 a bushel, to US$14.04. In Minneapolis, spring wheat futures were down US$0.33.75 a bushel to US$7.80.