Manhattan, Kansas
April 8, 2008
While the March 31 U.S. Department
of Agriculture planting intentions report contained several
surprises, a Kansas State
University grain market analyst believes the U.S. won't see
the dramatic drop in corn acreage the report indicated.
The report predicted a 6.5 million-acre drop in corn acres
planted, based on the planting intentions of U.S. corn
producers. However, K- State Research and Extension agricultural
economist Mike Woolverton said he believes actual acres planted
won't be that much lower because market conditions have changed
since the survey was taken a month ago.
"No one really believes we'll see those acres," Woolverton said.
"Right now, producers can make more with corn."
The report also predicted an 11-million-acre increase in U.S.
soybean acreage. That sent shock waves through each market, with
soybeans closing down their daily limit the day the report was
released and corn prices reaching record highs on all contracts.
"I don't think we're to the panic stage yet," Woolverton said.
"I think we'll see more corn and fewer beans (than the report
indicated). But things could happen between now and then."
Woolverton said one factor that could keep corn acreage down is
the difficulty producers are having getting into the field. He
said corn planting is already behind schedule in some areas.
Producers and investors will begin to breathe a little easier
once some significant acreage has been planted, he said.
The soybean market, Woolverton said, may be a little more
volatile.
The U.S. has picked up more soybean export business due to a
strike by farmers in Argentina. However, the strike is on a
30-day hiatus following political pressures surrounding a
disruption in that country's food supply caused by the strike.
Woolverton said the Argentine government has begun to show some
willingness to negotiate with farmers, but the strike may not be
over.
"I think if after 30 days the government has not relented,
they'll go back on strike," he said.
However, producers in Brazil are about halfway done harvesting
what is expected to be a record soybean crop for that country.
Woolverton said Brazil has started to take export business on
the new crop, which he said is evidenced by a 50 percent drop in
U.S. soybean exports for the week ending March 30.
But Woolverton said if the troubles in Argentina continue, it
could boost U.S. soy markets.
"The strike is showing Argentina can be an unreliable supplier,"
he said. "Buyers are starting to look around."
K-State Research and Extension is a short name for the Kansas
State University Agricultural Experiment Station and Cooperative
Extension Service, a program designed to generate and distribute
useful knowledge for the wellbeing of Kansans. Supported by
county, state, federal and private funds, the program has county
Extension offices, experiment fields, area Extension offices and
regional research centers statewide. Its headquarters is on the
K-State campus in Manhattan.z |
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