US corn sowings may yet hit post-war high

Ideas over current US corn stocks may have taken a knock - but history suggests that supplies for 2011-12 may yet prove more generous than some analysts are banking on, thanks to fickleness among farmers.

The US Department of Agriculture on Thursday pegged America's corn sowings this year at 92.2m acres - a rise of 4m acres, but still not enough in many analysts' eyes to achieve a significant rebuild in stocks, which separate data revealed had fallen far short of market expectations.

Even with a record crop in 2011, corn's stocks stocks-to-use ratio, a key measure of the tightness of supplies, "will only increase to 6.9%, the second lowest since 1995-96", Rabobank said.

However, history shows that US farmers may end up planting more corn than suggested by the USDA data, which was based on information from more than 85,000 growers garnered through surveys and interviews conducted in early March.

Indeed, sowings may yet top the post-war high of 93.5m acres reached four years ago - spring weather allowing.

2007 all over again?

"Historically, the USDA's first estimate in March has been conservative against the final planted area figure for corn," Australia & New Zealand Bank analysts said.

In 2007, farmers planted 3.3% more corn than they originally stated, at the expense of soybeans, for which the March estimate turned out to be nearly 4% too high.

"The similarity between now and 2007 is the dramatic change in additional revenue per hectare in planting corn over soybeans from the previous year," ANZ said.

"While soil moisture and temperatures will play a role, we may yet see the final corn planting area around 94m acres, and soybeans closer to 75m acres."

Soybean 'risk'

Every extra 1m corn acres would, dependent on yields, add more than 150m bushels (3.8m tonnes) to the harvest.

However, a plantings figure as low as 75m acres for soybeans, compared with 77.4m acres last year, would weaken further expectations for a revival in US supplies of the oilseed, which are also among their lowest since World War II.

Even the 76.6m acres that the USDA currently predicts may be less generous than it appears, given that the acres are expected to be lost largely in higher-yielding states such as top-ranked Nebraska.

"There may be downside risk to the underlying trend yield given the new acreage mix," ANZ said.

 "The states that gained acres have a production-weighted average yield of 37.2 bushels per acre, below the 2010 US average. Conversely, the 1.57m lost acres on average yielded 46 bushels per acre in 2010."