The US may be on for even bigger crops this year than farm officials have forecast, brokers said, questioning expectations that farmers will curtail sowings because of a fall in crop prices to two-year lows.
One of the major doubts emerging from the US Department of Agriculture's annual Outlook conference - one of the key dates in the farm commodities calendar, which reveals first formal estimates for domestic crops in 2014-15 – is over a forecast of sowings of major crops.
US farmers will plant 253.8m acres with major crops, for the 2014 harvest, down 700,000 acres year on year, the USDA said. For the big three – corn, soybeans and cotton – sowings will drop 1.1m acres to 227m acres.
However, last year was an unusually poor year for sowings, with wet weather preventing farmers from sowing more than 8m acres, far more than in a typical year.
Furthermore, some 800,000 acres is expected to emerge from the CRP conservation programme, on USDA estimates – adding to the potential area that can be sown.
"There seems to be 5m-6m acres missing in the mix," said Chicago-based broker Allendale.
At Benson Quinn Commodities, Brian Henry said that if the USDA had "factored in acreage coming out of CRP or even a portion of the 8.3m acres of prevent plant from last year, I haven't found it yet".
US Commodities said that the area estimate is "suspected to be too low", noting that "the government did not increase acres to account for the acres that came out of CRP, or the prevent plant acres from last year".
"The debate remains."
If brokers are right, US growers will be on for even bigger harvests than the USDA is factoring in – records for corn and soybeans – implying higher inventories left over at the close of 2014-15 and less need for buyers to compete for supplies, in turn signalling lower prices.
The USDA appears to think that because the "high prices of 2007-13 brought in a lot of acres which have not been cultivated before", a return to lower values means "those acres will now disappear", Rich Nelson, chief strategist at Allendale, told Agrimoney.com.
However, that was "not at all" a reasonable assumption.
"Our farmer clients are holding acreage steady. I have not heard of any acres in recent years being put back into hunting or recreational use," Mr Nelson said.
Some "90% of the US grain trade" this line of thought, with most factoring in estimates of 2.2bn-2.5bn bushels for US corn inventories at the close of 2014-15, rather than the 2.11bn bushels that the USDA revealed on Friday.
However, the question mark was bigger over soybeans, for which the USDA estimate for plantings of 79.5m acres was widely seen as 2m-3m acres too low, Mr Nelson said.
Allendale itself is estimating US soybean stocks at the end of next season at 381m bushels, nearly 100m bushels above the USDA's initial forecast.
However, others believe inventories could reach 450m-500m bushels - implying a tripling in stocks in one season.
The USDA on Friday said that its planting estimates were "driven by substantially reduced prospects for prices and returns compared with the previous two years".
The "persistent spring wetness" last year thwarted sowing of 2.0m acres of corn, soybeans and wheat, and prevented area exceeding the 30-year high of 230.1m acres set two years ago.