PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 18:33 UK, 17th Jan 2014, by Agrimoney.com
Informa adds 1.4m acres to US corn sowing forecast

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 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 elevated.

"Many have been predicting a large swap of acres to go to soybeans because of the price incentive, ourselves included," one US broker said.

"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 running."

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 contract.

New corn varieties have allowed the grain to be grown increasingly in northern, spring wheat areas, such as North Dakota, besides into Canada.

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.

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