April 29, 2011

Corn remains strong in Southeastern US states

In this planting season, corn is likely to remain strong in the Southeastern regions of US, as strong demand continues.

Strong demand for corn and continued good demand for livestock feed are driving forces. Corn has been planted throughout the south-eastern regions this spring and early reports indicate stands are good from the Florida Panhandle to northern Virginia.

Veteran North Carolina State Corn Specialist Ronnie Heiniger said that while corn is strong this year, growers must take heed of past opportunities to grow profitable corn that have turned out to be not so profitable. "Hopefully, we learned some valuable lessons from the 2010 crop, which was stressful due to near record heat and drought across much of North Carolina," said Heiniger.

Among the Southeast states, only North Carolina is expecting a 2% reduction in corn acreage in 2011. Georgia and Florida are expecting the biggest acreage increases of 12% and 8%, respectively. Alabama, South Carolina and Virginia are looking at increases of 3-5%.

Corn has long been the go-to crop for rotation in the Southeast. With high volatility in the market place, growers look more towards maintaining long-term crop viability, rather than towards taking advantage of high market prices.

Much of the optimism in corn prices continues to be driven by oil. High oil prices and gasoline prices projected to reach US$5 per gallon this summer have driven the demand for lower-cost energy, which drives demand for corn-based ethanol.

More than a third of the US corn crop, projected at 92.3 million acres for 2011, is expected to go to ethanol production. Likewise, demand for corn and for distillers grain, a by-product of ethanol production, remains high. Corn stocks in all positions at the end of 2010 stood at 6.52 billion bushels, below traders' expectations.