As 2012 winds down, analysts are busily trying to figure out how the 2013 acreage shifts will play out, but some say that even with a decline in corn acreage, stocks will likely build if yields return to normal.
"Even with a small decline in corn acreage, we could be building stocks significantly in the United States," says Bill Lapp, analyst with Advanced Economic Solutions in Omaha. "Supporting a December futures price of $6.24 would be problematic if stocks build significantly."
Some think corn acreage will drop sharply this year in some states adjacent to prime corn-growing states. Without another dry planting season, growers in the Dakotas will not be able to plant nearly as many acres to corn as they did last spring, says Chad Hart, agricultural economist with Iowa State University.
"That was one of the benefits of the drought. It was dry through planting, and Dakota producers were able plant acres they hadn’t been able to plant in years," says Hart. "If we get the acreage next year, that means we clearly didn’t get the moisture this winter."
Hart estimates that 4.5 million acres out of the 10.8 million acres of row crops planted last year were planted to corn and most of that corn was planted in North and South Dakota. If weather reverts to a typical planting season and snowfall helps replenish soils this winter and spring, producers in North and South Dakota won’t be able to plant anywhere near as much corn.
Informa has already increased its acreage forecast for 2013. The forecasting firm’s most recent estimates call for 99.026 million acres of corn, up from its previous estimate of 97.7 million acres. Informa, however, decreased its estimate for soybean plantings from 80.1 million acres to 78.962 million acres. Informa’s estimate for 2013 wheat plantings was down slightly from 42.5 million acres to 42.2 million, and cotton acres were increased substantially from 10 million to 12.12 million.
"Drought has improved over 2011, which was the worst all-time drought in Texas history," says John Robinson, agricultural economist at Texas A&M University. Row crop planting is set to begin in late January in South Texas where it’s been very dry. Without moisture, cotton will be the dominant drop, says Robinson, but if it significant rains develop, growers will plant grain sorghum.
"If it doesn’t rain or if growers expect a dry season, they’ll plant more cotton than they would have had it rained," he says. That pretty much holds true for all of Texas, Oklahoma, and Kansas.
Robinson expects Texas producers to plant 4.9 million to 5 million acres of cotton, well below 2012’s 6.6 million. In the United States, he expects producers to cut cotton acres to 9 million, which would be a sharp decline from last year’s 12.36 million acres.
"The biggest percentage decline will be in the Mid-South and the Delta because corn and soybeans are more attractive and feasible for those producers," he adds.
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