WRAPUP 2-US farmers going all out, but grain bins thinner
* 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:
USDA says spring wheat plantings to rise 5.1 percent:
USDA report-C corn seedings up 4.5 pct, soy down 1 pct:
Reuters Insider: Soy to Outpace Corn in Short Term:
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.
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)
© Thomson Reuters 2016 All rights reserved