October 13, 2010

US corn sowings may face acreage battle with soy

Corn sowings in the US need to jump at least a post-war record to avoid the country's stocks tightening even further, signalling a fierce acreage battle with soy which will stretch into next year.

Jerry Gidel, at North America Risk Management, said that corn sowings for next year's harvest need to rise 4-5 million acres "to just project a modest recovery in supplies for next year." US corn inventories are set to fall in 2010-11 to their lowest since the 1990s, the USDA said last week.

Don Roose, president of rival broker US Commodities, pegged extra sowings figure at up to 6 million acres, implying total sowings of potentially 94 million acres, the highest since 1944. US corn plantings often topped 100,000 acres before World War II, before soy were widely grown.

However, with US now also the world's top producer of soy too, and its stocks of the oilseed at relatively tight levels, there was "already a battle on for acres," which looked set to continue until spring planting decisions are made next year.

Chicago soy for November closed 2.3% higher at US$11.78 ½ a bushel, with corn soaring 4.2% to US$5.79 a bushel.

The result of the fight would be largely decided in foreign soil, in South America, a major grower of corn but, in particular, soy, where main harvests will be reaped early in 2011.