|
Corn Acreage
to Plunge, Soybean Acreage to Soar, USDA Forecasts
Corn producers intend to
plant fewer acres than expected in 2008, and soybean producers will
increase their acreage by an equal amount over expectations.
That was the big news in
the March U.S. Department of Agriculture Prospective Plantings
Report released early March 31, a report expected to send corn
prices soaring, soybean prices plummeting, and had at least one analyst
predicting that if the weather is less than favorable for corn this
spring and summer, the United States could run out.
"If the yield comes
in at 154.9 bushels per acre, which was the forecast at the USDA Outlook
Conference in Feburary, that will give us 12.203 billion bushels of
corn," said Terry Roggensack, principal and owner
of The Hightower Report in Chicago, IL.
"Ending stocks of 636
million bushels are extremely tight. If the yield is only the same as
last year (2007), we'll run out."
Here are the numbers from
the Prospective Plantings Report.
CORN
Corn growers intend to plant
86.0 million acres of corn for all purposes in 2008, down 8% from 2007,
when corn planted area was the highest since 1944.
Analyst predictions prior
to the March 31 averaged 87.39 million acres.
Expected acreage is down
from last year in most sates, as favorable prices for other crops, high
input costs for corn, and crop rotation considerations are motivating
some farmers to plant fewer acres to corn.
Despite the decrease, corn
acreage is expected to remain at historically high levels, as the corn
price outlook remains strong due, in part, to the continued expansion
in ethanol production.
SOYBEANS
Soybean producers intend
to plant 74.8 million acres in 2008, up 18% from last year but 1% below
the record high acreage of 2007.
The average prediction from
the analysts had been 71.72 million acres.
Acreage increases are expected
in all states, except in West Virginia, which is unchanged from 2007.
The largest increases are
expected in Iowa and Nebraska, up 1.25 million acres and 1.20 million
acres from 2007, respectively.
Increases of at least 800,000
acres also are expected in Indiana, Minnesota, and South Dakota.
If realized, the planted
acreage in Kansas, New York, and Pennsylvania will be the largest on
record.
ALL WHEAT
All wheat planted area is
estimated at 63.8 million acres, up 6% from 2007.
Analyst forecast had been
almost on the nose, averaging 63.63 million acres.
The 2008 winter wheat planted
area, at 46.8 million acres, is 4% above 2007 and up slightly from the
previous estimate.
Of this total, about 32.5
million acres are hard red winter, 10.7 million are soft red winter,
and 3.63 million acres are white winter.
Area planted to other spring
wheat for 2008 is expected to total 14.3 million acres, up 8% from 2007.
Of this total, about 13.6
million acres are hard red spring wheat.
The intended durum planted
areae for 2008 is 2.63 million acres, up 22% from the previous year.
ANALYSIS
Speaking March 31 from the
floor of the CME Group's Chicago Board of Trade (CBOT)
prior to the opening of trading, analysts predicted that new crop corn
prices will likely fluctuate between $6.20 and $6.55 per bushel.
The Hightower Report's Roggensack
noted that the forecast for feeding livestock is relatively high.
"Hogs are probably undervalued
right now, and farmers are hanging onto supplies in anticipation of
higher prices," added Don Roose, owner of U.S.
Commodities, West Des Moines, IA. "Cattle numbers are also high."
Potentially adding to the
volatility of the market are heavy rains forecast to continue for at
least another six to 10 days in the Delta and southern Corn Belt regions,
which could cause planting delays.
All of these factors would
drive acreage into soybeans, which are able to stand up to wet conditions
and late planting better than corn.
Also, Roggensack noted, tight
fertilizer supplies are contributing to a switch in acreage from corn
to soybeans, since soybeans do not require nitrogen fertilizer.
The only factor he saw that
might put at least a temporary floor under soybean prices is the resumption
of the farmer strike in Argentina, where producers are protesting increased
export taxes on grains and oilseeds.
USDA
March 31 Prospective Plantings Report
USDA
March Grain Stocks Report
|