WRAPUP 2-US farmers going all out, but grain bins thinner

Thu Mar 31, 2011 3:34pm GMT
 

 * U.S. corn and soy stockpiles smaller than expected
 * Corn, soy supplies will be tight in year ahead
 * Corn plantings seen up 4.5 pct this year, soy down 1 pct
 * Traders expect corn, soy, wheat futures to surge
 By Charles Abbott
 WASHINGTON, March 31 (Reuters) - Farmers will struggle to
replenish rapidly shrinking U.S. grain stocks this year,
despite plans to sow the most land to corn since World War Two
and near-record acreage to soybeans, two U.S. government
reports showed on Thursday.
 Chicago corn Cc1 prices surged their daily limit, while
soybeans Sc1 and wheat Wc1 jumped more than 3 percent as
traders looked past higher-than-expected figures in the
Department of Agriculture's annual planting survey to focus on
inventories, which fell much more than forecast.
 The report underscored the fact that U.S. farmers are now
reaching the limits of arable land in the world's biggest crop
exporter, with increased corn sowing coming at the expense of
soybeans and cotton. The spring wheat crop, while among the
biggest in decades, could yet shrink.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
 U.S. soy stocks as of March 1 lowest since 2004:
 r.reuters.com/zyh78r
 USDA says spring wheat plantings to rise 5.1 percent:
 r.reuters.com/xyh78r
 USDA report-C corn seedings up 4.5 pct, soy down 1 pct:
 r.reuters.com/wyh78r
 Reuters Insider: Soy to Outpace Corn in Short Term:
 link.reuters.com/hat78r            
 ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
 This year's spring planting season in the world's biggest
crop exporter is being watched more closely than ever by
countries fearful that further increases in already record-high
food prices could stoke unrest.
 An analysis of the data based on the acreage estimates and
historical yields suggested that the corn harvest could be the
largest ever and soybeans the third-largest.
 But that would still leave corn inventories at the end of
the 2011/12 season at the equivalent of just three-weeks'
supply, and soybeans would dwindle to scarcely 10 days' cover.
Analysts say prices must rise high enough to reduce demand.
 "This turns us back to having to ration the corn," said
Charlie Sernatinger, analyst at ABN Amro.
 May corn jumped 30 cents to $6.93-1/4 a bushel, hitting the
daily exchange limit; options trading suggested further gains
to more than $7.15, near the post-2008 peak of $7.35 hit on
March 4. Soybeans jumped to over $14.18 and wheat recouped part
of its 20 percent slump since mid-February.
 NEARLY POST-WAR PEAK
 Farmers plan to sow 92.2 million acres with corn, the most
since 2007 and second-largest since World War Two. That's up
4.5 percent from a year ago, more than the 4.1 percent rise
that traders expected.
 But it will still be only barely enough to replenish stocks
drained by strong ethanol demand at home and ravenous demand
abroad, including surprise buying from China. Stocks are
falling faster than expected, with inventories as of March 1 at
6.52 billion bushels, about 2.5 percent less than forecast.
 Soybeans, which have fallen 5 percent since hitting a
post-2008 peak of $14.50 a bushel in February, will be sown on
76.6 million acres, the third-most ever and only marginally
less than forecast. But inventories on March 1 were 1.25
billion bushels, 4 percent less than traders predicted.
 USDA's estimates are based on a survey of growers during
early March. Farmers can change plans before planting ends in
May. Wet weather often delays planting, which can prompt
farmers to sow soybeans over corn.
 With normal weather and yields, the U.S. corn crop could be
a record 13.7 billion bushels this year and soybeans could
total 3.28 billion bushels.
 The 2011/12 carry-out would be 850 million bushels for corn
and a scant 100 million bushels -- a 1-1/2 week supply -- of
soybeans, based on USDA projections of usage and beginning
stocks.
 TOTAL ACRES
 Farmers will sow 253.8 million acres to the eight major
crops this year, up 3.5 percent from last year and the most
since 1998. Analysts say this will require double-cropping on
some land -- planting soybeans after reaping wheat in the
spring, for instance -- or bringing lower-quality land into
production rather than let it sit fallow or be used as
pasture.
 Iowa, the No. 1 corn state, is expected to plant 13.9
million acres of corn, up 4 percent. Illinois, the No. 2
producer, was forecast to plant 12.8 million acres, up 2
percent from 2010. Nebraska, also a premier grower, would plant
9.5 million acres, up 4 percent.
 Some of the corn planting will squeeze out soybeans. USDA
said Iowa, Kansas, Nebraska and Ohio each will reduce soybean
area by 100,000 acres or more.
 Wheat plantings were forecast at 58 million acres, up 8
percent from 2010, led by a 10 percent increase in winter
wheat.
 The Prospective Plantings report overstated corn plantings
in 12 of the last 20 years and under-stated soybeans in 13 of
20 years. The margin of error for both crops is 3.5 percent.
 (Additional reporting by Roberta Rampton, Christopher Doering,
Emily Stephenson and Russell Blinch in Washington and Karl
Plume in Chicago; editing by Jim Marshall)

Market Update

  • Africa
  • US
  • Europe
  • Asia
UK £ USD =1.3389
Euro USD =1.1098
Rand USD =0.0672