The prospect that U.S. farmers could plant less corn and more soybeans this spring than last year is starting to seep into the market phsyche. Some analysts are now starting to predict that corn prices could push $5 a bushel during 2009.
Results of this week's Reuters Food Agriculture Summit estimated U.S. corn plantings at 83 million to 85 million acres, down from the 86 million in 2008. The analysts forecast soybean plantings at a record 80 million acres. The increase reflects the prospect of farmers switching away from corn's higher planting and fertilizer costs.
Further surprising the market, Informa Economics this week forecast U.S. corn plantings at only 81.4 million acres, well below what most expectations.
Dan Basse, president of Chicago consultancy AgResource, forecast Chicago Board of Trade corn prices will trade in the $3.50-to-$5-per-bushel range this season. Analyst Bill Lapp, president of Advanced Solutions Economics, projected corn prices at $5 a bushel by year-end, reports Reuters.
Market analysts also cited prospect of increased ethanol demand if the blend rate is raised as well as a possible rebound in export sales during the year.
However, Jim Borel, with DuPont Co's Pioneer Hi-Bred unit, points out that U.S. corn seed sales have been ahead of the previous season for the last few months.