Rising US corn prices may spur sowings

US farmers will pocket the highest farm-gate price for corn in six years, an average $2.45 a bushel, thanks to high-volume exports and strong demand at home for livestock feed and ethanol, the government said on Tuesday.
As a result, the US Agriculture Department said, the corn (maize) stockpile should shrink to 901 million bushels (22.88 million tonnes), the smallest supply since 1997, before the new crop is harvested this autumn.
"I think the fireworks are just beginning," said analyst Emily French of the consulting firm World Perspectives. She said feed (coarse) grain stockpiles world-wide were becoming "precariously tight."
Stockpiles would drop by nearly one-third, or 45 million tonnes, this trade year, the USDA estimated. Corn accounts for the lion's share of feed grain production around the world.
Rising prices may prompt US farmers to plant more corn this year despite the highest soybean prices since the mid-1990s when grain and oilseed values soared in the face of short supplies.
Some analysts say corn sowings may climb by 2 million acres (809,000 hectares) from last year's 78.7 million acres (31.85 million hectares). The USDA has projected 79.5 million acres (32.2 million hectares) and will update the figure at its annual agriculture outlook forum on February 19 and 20.
In a monthly look at crop output and demand around the globe, USDA raised its forecast for US corn and wheat exports by 25 million bushels each for this marketing year, to 1.15 billion bushels for wheat (31.3 million tonnes) and 2 billion bushels (50.8 million tonnes) for corn.
Competition from South America's soybean crop - which includes a record 61 million tonnes from Brazil and is now ready for harvest - "will limit US soybean exports during the second half of the marketing year," USDA said. It kept its forecast of US soybean exports at 900 million bushels (24.49 million tonnes).
USDA forecast a 25-million-bushel increase in use of corn for livestock feed, and said ethanol plants would use an additional 30 million bushels. At 901 million bushels, the corn carry-over supply would be the smallest since the 883.2 million bushels on hand at the end of the 1996/97 marketing year.
With larger exports, the wheat stockpile would fall to 534 million bushels (14.5 million tonnes), USDA forecast.