& Reuter News Agency
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SASKATOON – American farmers will plant more corn this year, but not enough to replenish dwindling stocks, the U.S. Department of Agriculture said in two reports released last week.
In its annual prospective planting report, USDA reported farmers will plant 79.2 million acres to their staple crop.
That projected 11 percent increase, eight million more acres than 1995, would be the biggest corn acreage since 1985. But it’s still two million acres less than most analysts expected.
The first quarterly stocks report of 1996 pegged corn stocks at 3.799 billion bushels. That is 110 million bushels less than what most analysts predicted was being stored by the government, companies and farmers.
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Both reports were released at 8:30 am Eastern Standard Time March 29. The combination of less-than-expected acreage and smaller-than-expected stocks meant by the time the closing bells rang at the Chicago Board of Trade, May corn futures settled at 4.09, up 9.75 cents. Early in the session, May rose to a peak of $4.101Ú2, the highest price ever for a nearby corn contract.
Trade was also fast in wheat, soybeans and soybean meal, spilling over from the frenzy in the corn pit.
In a telephone press conference, Chicago analysts said higher corn prices are needed to slow consumption and prevent exhausting supplies before new-crop corn is harvested next fall.
Gregg Hunt, a grain broker for Rand Financial Services, said: “What this is saying is … we have to liquidate a serious amount of livestock. And the only way we can do that is with much higher (corn) prices.”
At the Chicago Mercantile Exchange, April feeder cattle prices set a contract low at 55.65 cents due to the rally in corn.
Soybean acreage was predicted to fall marginally to 62.478 million versus 62.575 in 1995, while total wheat acreage, including spring wheat and durum, was forecast to rise to 73.108 million acres, versus 69.177 million last year.
