|US farmers 'cut cotton sowings to grow more corn'
US corn sowings rose this year by even more than previously forecast, as lower prices dissuaded farmers from growing cotton, Informa Economics said, opening the countdown to the next key set of American crop data.
The influential analysis group raised by 700,000 acres to 96.8m acres its forecast for US corn plantings this year - representing an increase of 7.7m acres year on year.
The upgrade, to the largest area since the 97.2m acres planted in 1937, reflects one of the first forecasts from a major analysis group in the run-up to a much-watched US Department of Agriculture report on June 29 on domestic crop sowings.
And it contrasts with expectations earlier in the year that revival in soybean prices, compared with corn, over the spring had lured many growers to plant the oilseed instead.
However, Informa raised its estimate for soybean seedings too, by 200,000 acres to 76.0m acres, a rise of 1.0m acres year on year.
The casualty was cotton, for which the sowings estimate was cut by 1.0m acres to 13.0m acres.
Many investors have forecast that the continued decline in cotton prices over the spring would make farmers think twice about sowing the crop.
Goldman Sachs earlier this week forecast "higher cotton prices in the near term, as we expect the USDA will lower its US acreage forecast on June 29".
Indeed, the impact of the data on cotton prices was to prompt a revival nearly to 71 cents a pound, for the December contract, before it settled back down to 70.77 cents a pound, up 0.2% on the day.
The data encouraged further selling in new crop corn futures, taking them to their intraday low of $5.10 ½ a bushel, down 1.1% on the day.
The report "has put additional pressure on the all of the markets this morning", Darrell Holaday at Country Futures said.
Prices had already been pressured by jitters ahead of this weekend's Greek elections, concerns which cost soybeans and wheat futures early headway too.
The Informa data imply sowings of corn and soybeans considerably higher than USDA forecasts from March of 95.9m acres and 73.9m acres respectively.
Then group's forecast for "other spring wheat" – non-durum varieties – was kept at 13.5m acres, also higher than the USDA estimate, of 12.0m acres.
However, Informa believes growers, attracted by high prices, will sow an extra 4m acres overall than the USDA's March report showed.