The U.S. corn crop may rise as farmers plant the most acres since World War II, easing pressure on higher food and fuel prices, the government said Thursday.
Soybean planting may be little changed while wheat expands.
Farmers will sow corn on 94 million acres, up 2.3 percent from last year and the most since 1944, Joe Glauber, the chief economist for the U.S. Department of Agriculture, said at a conference in Arlington, Va.
The forecast was less than the 94.329 million expected by analysts in a Bloomberg News survey, and unchanged from an estimate in the USDA’s 10-year baseline report, released Feb. 13.
Rising corn output and slowing demand for use in ethanol may boost U.S. inventories of the grain that shrank to a 16-year low in the past year. Average corn prices received by farmers in 2012 will be $5 a bushel, down 19 percent from last year, while wheat prices will slide 14 percent and soybeans may drop 1.7 percent, Glauber said.
“While supplies still remain tight for feed grains, slowing growth in biofuels and a return to trend yields should result in a rebound in corn stocks this year,” Glauber said in a speech. “Over time that should help relieve some of the volatility that has roiled markets over the last several years.”
Soybean planting may be unchanged from last year at 75 million acres, Glauber said. That’s above the 74 million forecast in the baseline report.
Wheat seedings may increase 6.6 percent from last year to 58 million acres, above the Feb. 13 forecast of 56.5 million.
The USDA said Feb. 13 that U.S. corn production would climb to a record 14.235 billion bushels, while increasing yields would boost soybean output to 3.215 billion bushels and the wheat harvest may rise to 2.12 billion. Glauber didn’t update production forecasts in his speech Thursday.
The USDA’s projection for U.S. acreage was “very much expected” by traders, Steve Kahler, a managing director at Teucrium Trading, said in an interview in Arlington after Glauber’s speech.
“The record high prices we’ve seen the last couple of years is financial incentive for people to plant fence row to fence row,” said Kahler, whose company sponsors exchange-traded funds for commodities ranging from corn to natural gas.
“Given that we’ve had a tight ending-stocks situation, people are really looking to the next crop year to resolve the deficit in supply.”
U.S. agricultural exports in the year that began Oct. 1 may total $131 billion, down $1 billion from the USDA’s forecast in November and below last year’s record, Glauber said.
Ethanol makers may use 4.95 billion bushels of corn this year, 50 million bushels less than a year earlier, Glauber said. Corn stockpiles will “likely increase” over the next year, easing costs for livestock producers, he said.