US corn lag cuts yields but fertilizers OK - BoA

21 May 2008 00:00  [Source: ICIS news]

HOUSTON (ICIS news)--The delayed start to US corn planting would cut expected yields but demand for fertilizers and crop protection chemicals would remain strong, analysts at Bank of America (BoA) said on Wednesday.

The rain-dogged start to corn planting and the associated ammonia application season had stirred ideas that some farmers might switch to soybeans, which can be planted later.

But the relative prices of corn and soybeans still point to farmers sticking with corn and meeting the US Department of Agriculture (USDA) acreage projection, BoA said in a commentary.

"We believe the USDA’s forecast for 86m planted corn acres is still achievable, particularly with current economics, although yields may fall," the analysts said.

Given current prices of around $5.90/bushel for corn and $13.33/bushel for soybeans, even if yields fell to as low as 127.8 bushels/acre – compared with the USDA projection of 153.9 bushels/acre – for corn, that crop would still provide the same return to farmers as soybeans, it said.

"In addition, today’s technology allows farmers to plant much more quickly than in the past, allowing for more flexibility when weather issues delay planting," the analysts noted.

The corn crop was 73% planted as of 18 May up from 51% a week earlier and rapidly catching up to the five-year average for this time of year of 88%, the USDA said on Monday.

To discuss issues facing the chemical industry go to ICIS connect
For more on fertilizers visit ICIS chemical intelligence

By: Stephen Burns
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly