US corn 2008 acres down 8%, soy up 18% - USDA

31 March 2008 17:10  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS news)--US farmers will plant 86.0m acres of corn, an ethanol feedstock, in 2008, down 8% from last year’s 63-year high, the US Department of Agriculture (USDA) said on Monday. 

“Favourable prices for other crops, high input costs for corn, and crop rotation...are motivating some farmers to plant fewer acres to corn,” the USDA said.

In contrast, the government said it expects soybean producers to plant 74.8m acres in 2008, an 18% increase from last year, but 1% below the record high acreage in 2006.

US farmers were switching to soybean, a biodiesel feedstock, because of the high costs of fertilizers, an ethanol producer said on the sidelines of the 33rd National Petrochemical & Refiners Association (NPRA) meeting.

“Soybean injects nitrogen into the soil, but that does not happen with corn,” the producer said.

The drop in corn acreage for 2008 was mostly priced in by the market and should not lead to a further surge in corn prices, the producer said.

However, prompt corn in Chicago shot up on Monday, hitting an early intraday high of $5.88/bushel after opening at $5.79/bushel. The contract closed at $5.60/bushel on Friday.

Soaring corn prices have severely squeezed margins for US ethanol producers. High soybean prices have also hurt US biodiesel producers.

USDA expects corn prices to average $3.75-4.25/bushel in the 2007-2008 crop year, up 30% from $3.04/bushel assessed by USDA for 2006-2007.

Ethanol fuel prices have lagged, gaining only about 7% in the last 12 months.

Anhydrous spot ethanol in Chicago was assessed at $2.48-2.50/gal in the week ended 28 March, up from $2.30-2.35/gal a year ago, according to global chemical market intelligence service ICIS pricing.

For more on ethanol visit ICIS Chemical Intelligence

Bookmark Simon Robinson’s Big Biofuels Blog for some independent thinking on biofuels

By: William Lemos
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