Grainnet

U.S. farmers are responding to market signals by planning to plant more than 90 million acres of corn this year, the largest acreage since World War II.

The U.S. Department of Agriculture (USDA) said in its March 30 Prospective Plantings Report this morning that corn growers intend to plant 90.5 million acres, up 15% from 2006 and the largest acreage since 1944.

That acreage will come largely at the expense of soybeans, USDA reported, with growers planning to plant 67.1 million acres, down 11% from 2006 and the smallest acreage since 1996.

Wheat acreage will increase more modestly to 60.3 million acres, up 5%.

In addition to the huge loss in soybean acres, about 3 million more than trade analysts had anticipated, the new corn acreage also is coming at the expense of spring wheat and cotton, in regions of the country where those crops are grown.

Corn

Corn growers intend to plant 90.5 million acres of corn for all purposes in 2007, up 15% from 2006 and 11% higher than 2005.

If realized, this would be the highest acreage since 1944, when 95.5 million acres were planted for all purposes.

Expected acreage is up in nearly all states, as high corn prices are encouraging farmers to plant more acres to corn.

The increase in intended corn acres is offset partially by lower expected acres of soybeans in the Corn Belt and Great Plains and fewer expected acres of cotton and rice in the Delta and Southeast.

Illinois farmers intend to plant a record high 12.9 million acres of corn this spring, up 1.6 million acres from last year.

North Dakota and Minnesota growers also expect to plant record high corn acres, up 910,000 and 600,000 acres, respectively.

Soybeans

Soybean producers intend to plant 67.1 million acres in 2007, down 11% from last year.

If realized, this will be the lowest planted area since 1996.

Acreage decreases are expected in all growing areas, except in New York and the Southeast.

Large reductions in soybean acreage are expected across the Corn Belt, with the largest decline expected in Illinois, down 1.4 million acres from 2006.

However, area planted to soybeans is expected to increase in the Southeast, with Georgia expecting the largest increase from last year at 95,000 acres.

Planted acreage in New York is expected to be the largest on record, at 210,000 acres.

All Wheat

All wheat planted area is estimated at 60.3 million acres, up 5% from 2006.

The 2007 winter wheat planted area, at 44.5 million acres, is 10% above last year and up 1% from the previous estimated.

Of this total, about 31.9 million acres are hard red winter, 8.66 million acres are soft red winter, and 3.92 million acres are white winter.

Area planted to other spring wheat for 2007 is expected to total 13.8 million acres, down 7% from 2006.

Of this total, about 13.3 million acres are hard red spring wheat.

The intended durum planted area for 2007 is 1.99 million acres, up 6% from the previous year.

Analysis

While such a huge acreage number for corn might be seen as bearish for prices, according to conventional wisdom, analysts participating in a teleconference from the Chicago Board of Trade this morning said that weather this spring and summer will play a huge role.

Jerry Gidel, president of Midland Research Inc. and grain analyst with North American Risk Management Services Inc. in Chicago, IL, said that even with a trend yield of 152 bushels per acre, that will leave carryout stocks of only 900 million to slightly over 1 billion bushels at the end of the 2007-08 crop year.

That means that farmers will need to be planted in a timely fashion, by May 15 across the Corn Belt, and any unusually wet weather could cause prices to skyrocket this spring.

Jim Bower, owner and president of Bower Trading Inc., Chicago, said the potential for a La Nina event this year is "scary."

La Nina refers to a periodic cooling of Pacific Ocean waters off the coast of South America and frequently is associated with cold, wet springs in the Midwest, followed by hot, dry summers.

Bower commented that the current cold, wet weather across the Upper Midwest and warm, dry weather in the Southeast is typical for a La Nina pattern for this time of year.

While the behavior of corn prices remain a question mark, analysts said the soybean acreage numbers clearly were bullish, with carryout stocks at the end of 2007-08 as low as 200 million bushels.

The wheat numbers were seen as mildly negative for the price outlook, though some increased wheat feeding was expected to boost demand.

See Related Websites/Articles:

• March 30 USDA Prospective Plantings Report
• March 30 USDA Grain Stocks Report

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