Indiana Grain Company, LLC

Posted: 03/17/10

By: tomgrisafi

U.S. farmers, encouraged by lower fertilizer costs, will plant more acres to corn this spring than a year ago, while soy seedings will remain around the same as in 2009, grain analysts told the Reuters Food and Agriculture Summit in Chicago on Tuesday.

U.S. 2010 corn plantings were projected at 89.3 million to 91 million acres and soybeans at 76.5 million to 78.7 million acres. Last year, U.S. farmers produced record corn and soybean crops based on planted acreage of 86.5 million corn acres and 77.5 million soy acres.

Corn and soybean prices on the Chicago Board of Trade, spring weather, and shifting yield potential for both crops will as usual drive final farmer decisions on how many acres they will seed to corn and soy, the two largest row crops.

"The trade is leaning toward more corn acres and less soybean acres. But the surprise could be the other way around. Historically, the trade has underestimated soy seedings," Rich Feltes, senior vice president of MF Global Research, said in a roundtable discussion at the summit.

Based on current conditions, Feltes estimated U.S. corn seedings at 89.75 million acres and soybeans at 78 million.

At its annual outlook forum in February, the U.S. Department of Agriculture projected 2010 corn seedings at 89.0 million acres and soybeans at 77.0 million.

But the USDA's first estimate of U.S. corn and soybean seedings based on actual farmer surveys will be released on March 31. Until then, trade speculation about USDA's planting forecast will affect CBOT grain markets.

The world grain trade uses the March plantings numbers and then historical yields until the August field surveys to project annual corn and soy production from the United States, the world's single largest exporter of the key grains.

Source: Chicago Tribune, Reuters

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