A taste of $4 futures could be all the incentive growers need to plant the most corn in more than 60 years, according to a new Farm Futures magazine survey of planting intentions for 2007.
Based on the latest survey, conducted by email from January 5 to January 21, Farm Futures estimates producers currently plan to put in 88.4 million acres of corn this spring, a 10.1 million acre increase from 2006. If realized, this would represent the highest corn acreage total since 1946.
During the survey period, December corn futures rallied more than 35 cents a bushel in response to the bullish January 12 USDA supply and demand report. This included the first trades in history for a December contract over $4.
"Tightening old crop supplies and strong demand for corn to produce ethanol will require both good weather and a huge increase in acreage to keep the U.S. from running out of corn in 2007," says Farm Futures Market Analyst
Farm Futures first survey of 2007 planting intentions in early September suggested farmers wanted to put in 85 million acres of corn this coming spring. "The post-harvest rally in corn convinced them to follow through with those plans," says Senior Editor
By the time USDA releases its benchmark survey of planting intentions at the end of March, the numbers could get even bigger - if the price is right. More than 40% of those surveyed said they would consider shifting acres at the last minute, though the average farmer surveyed said it would take $4.50 December futures to trigger a switch.
The surge in corn acres will take a heavy toll on soybean plantings. Farm Futures estimates acreage could drop to 69.5 million acres this spring, down from 75.5 million in 2006. Last fall's survey put soybean plantings at around 72 million.
"The potential for soybean plantings to drop so sharply this year is helping support the soybean market, despite plentiful old crop supplies," says Suderman. He notes the ratio of new crop soybean to corn prices has fallen below 2 to 1 recently.
The magazine's survey included 484 farmers from across the U.S. Farm Futures survey of corn intentions for 2006 proved the most accurate of those released prior to USDA's March 31, 2006 prospective plantings report.