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FARM FUTURES SURVEY SHOWS FARMERS READY TO SWITCH CORN GROUND BACK TO SOYBEANS
Source: Farm Futures news release

Spurred by record new crop prices and demand, U.S. farmers planted a mammoth corn crop in 2007 by undertaking a groundbreaking shift in acreage. But a new Farm Futures survey suggests this year was just the prelude to what's shaping up as an unprecedented battle to buy acres in 2008.

Thanks to a year-long rally in soybean prices, farmers are ready to shift back to their traditional rotations - a move that could tighten corn supplies to dangerously low levels according to Farm Futures market experts.

Producers responding to an August e-mail survey reported they were ready to cut corn acres by 9% next year, putting the ground back to soybeans. The survey put 2008 corn intentions at 84.9 million acres, down from 92.9 million this year. Soybean seedings would surge to 72.6 million, up from 64.1 in 2007. Wheat acres could fall slightly to 59.8 million, down from 60.5 million in 2007.

"This year's massive shift in acreage showed farmers have learned how to respond to the signals of the market," says Farm Futures Senior Editor Bryce Knorr, who directed the survey. "Now with stocks of corn, soybeans and wheat all projected to be tight in 2008, prices will decide what crops they plant."

Indeed, Farm Futures research also suggests the recent rally in wheat prices since the survey was conducted could increase winter wheat seedings by 1 million acres or more if gains hold into the fall.

Based on the August survey, Farm Futuresforecasting model shows Sept. 1, 2009 corn supplies could fall to just 685 million bushels, even with significant rationing in exports and feed usage. Soybean stocks would barely grow at all despite the increase in seedings, while wheat supplies also would remain close to this year's tight projected levels.

"High input costs and attractive soybean prices have lured farmers away from corn's charm," says Suderman. "Unfortunately, corn can't afford to give up 8 million acres without significantly reducing demand, setting up a classic bidding war for acres over the next six months."

The magazine's estimates are based on an exclusive e-mail survey of more than 600 producers conducted July 26 to August 4. More details will be forthcoming in the October issue of Farm Futures, which will feature the cover story "Turf Wars: The Battle to Buy Acres in 2008."


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