April 11, 2012

 

US Minnesota corn sowing to hit highest level

 

 

US Minnesota farmers plan to sow a record number of acres with corn for 2012, as the outlook for the crop is particularly cost-effective.

 

Corn planting will cover an estimated 8.7 million acres, up 7% from last year, according to a Friday (Apr 6) report from the USDA. Nationally, corn acreage will be the highest since 1937.

 

In Minnesota, the gain in corn acreage appears to be coming at the expense of soy and spring wheat plantings. Growers of soy, who often also grow corn, say they'll plant 6.9 million acres in Minnesota, down 3% from a year ago.

 

Minnesota farmers plan to sow 1.4 million acres of spring wheat, down 10% from a year ago, according to the USDA.

 

Corn prices and soy prices are historically high, but corn appears to be a considerably more profitable crop in the Midwest this year.

 

Tom Neher, a vice president at lender AgStar Financial in Rochester, said that at current prices southern Minnesota farmers can make about US$130 per acre on corn compared with US$60 per acre on soy, because corn has higher yields.

 

The price of corn, soy and wheat all surged Friday as another USDA report showed that US grain and oilseed supplies are tighter than analysts expected.

 

Corn prices rose the most since June 2010, with corn futures for May delivery on the CBOT jumping US$0.40- the daily limit - to US$6.44 a bushel.

 

On the Minneapolis Grain Exchange, spring wheat futures jumped the most in 10 months. Not only are many farmers opting out of spring wheat for corn this year - potentially lowering supply - but stocks of all wheat are down 16%% from a year ago.

 

Spring wheat is grown particularly in the Dakotas, Minnesota and Montana.

 

If grain and oilseed prices remain high, prices for packaged food makers are likely to rise, and ultimately consumers could feel the effect in the supermarket.