Corn futures extended losses after Informa Economics curbed expectations
for the drop in US corn sowings this year, after some recovery in the price of
the grain compared with soybeans and spring wheat, its rivals for area.
Corn for March touched $4.22 ¼ a bushel in Chicago, down
1.3%, after Informa hiked by more than 1.4m acres, to 93.3m acres, its forecast
for US corn plantings.
While below the 95.4m acres sown this year, that would
nonetheless represent a historically high figure, beaten only three times since
World War II, and stoked ideas of another strong US corn harvest this year.
Corn vs soybeans
The extra corn area was seen coming in part at the expense
of soybeans, for which the acreage number was cut by some 600,000 acres to
81.3m acres, albeit still a record high.
Corn futures for December 2014, the new crop benchmark, have
recovered some ground against their soybean counterpart, the November contract,
improving the appeal of the grain, although the soybean:corn ratio of 2.50:1 on Friday remains historically
"Many have been predicting a large swap of acres to go to
soybeans because of the price incentive, ourselves included," one US broker
"If they take away that incentive before spring we may not
see such a drastic change in acres.
"Still it is a good year for rotation anyway just because of
the diminishing returns that some are experiencing with corn-on-corn for many years
Corn vs wheat
However, Informa also slashed its estimate for the number of
acres going to spring wheat by nearly 1m acres to 12.1m acres.
Minneapolis spring wheat futures for December 2014 have fallen
by 7.1% over the past month, depressed by supplies from last year's record
Canadian harvest, compared with a 1.0% fall in Chicago's December 2014 corn
New corn varieties have allowed the grain to be grown
increasingly in northern, spring wheat areas, such as North Dakota, besides
Earlier on Friday, Morgan Stanley forecasting US corn
sowings of 92.5m acres this year, and production of 13.5bn bushels, assuming a
trend yield it pegged at 158.8 bushels per acre.