U.S. farmers will plant the most corn in 75 years to cash in on higher prices, topping expectations due to surprise reductions in soybean and spring wheat sowings, according to a U.S government report on Friday.
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The dramatic expansion raised hopes that the next harvest would ease razor-tight supplies that have kept corn prices near historic highs.
The U.S. Department of Agriculture, in a separate report, said supplies in storage as of March 1 were smaller than expected.
"Going forward, it's going to be all about the planting weather," said Don Roose, president of U.S. Commodities.
In the annual prospective plantings survey, farmers were aiming to plant record amounts of corn in Iowa, Minnesota, North Dakota, South Dakota and Idaho.
Nationally, the plantings outlook was up 4% from last year and above analyst expectations for 94.72 million acres.
Soybean plantings were projected to fall 1% from last year to 73.9 million acres, increasing concerns about tightening global supplies of the oilseed due to poor harvests in South America. Analysts had expected soy plantings to increase to 75.393 million acres.
"Acreage is expected to shift to corn," the USDA said.
Farmers are focusing on corn because prices remain lofty after reaching a record high last year on strong demand that drained supplies. The increase in plantings should boost supplies, which have been forecast to drop to the lowest level since the mid-1990s by the end of the crop's marketing year in September.
If USDA's projection holds, it will be the most corn planted since 1937 when an estimated 97.2 million acres were planted.
USDA estimated farmers will plant 12 million acres of spring wheat other than durum, with a record low number of acres seeded in South Dakota. That is down 3% from last year and below the average trade estimate of 13.313 million acres.
USDA's projection for a total wheat planted area of 55.9 million acres was up 3% from 2011 but well below the average analyst estimate of 57.422 million acres.
Growers intended to plant 13.2 million acres of cotton, down 11% from last year, and 2.56 million acres of rice, down 5%, according to the USDA report.
The acreage estimates implied a corn harvest of 14.5 billion bushels, a soy harvest of 3.2 billion bushels, wheat harvest of 2.1 billion bushels and cotton harvest of 18 million bales, according to Reuters calculations that assume a normal number of abandoned acres and normal weather and yields.
The U.S. corn stockpile was down 8% from a year ago, the government said, with consumption running faster than traders expected.
In a quarterly report, the Agriculture Department said there were 6.009 billion bushels of corn in storage as of March 1, 2% less than traders expected. Some 3.6 billion bushels were consumed during the quarter, equal to 30% of the 2011 crop.
Traders estimated consumption would be 4% smaller than USDA estimated. USDA surveyed 84,500 growers and all 8,900 commercial storage facilities to develop its figures.
Soybean stocks were estimated by USDA at 1.372 billion bushels, up 10% from a year ago but 1% smaller than traders expected. Some 994 billion bushels were consumed since Dec. 1.
Wheat stocks totaled 1.201 billion bushels, according to USDA, down 16% from a year ago and 2% less than traders expected.
Slightly more than half of the corn was held on the farm. USDA said it had a margin of error of 4.4% for the on-farm figure for corn.
Traders have faulted USDA's stocks figures during the past year and varied among themselves of the likely March 1 level. Strong demand for corn for exports and making ethanol were expected to eat into U.S. supplies, but some traders said the mild winter would reduce corn used for livestock feed.