Food Business News - April 10, 2012 - (Page 36)

Market Insight Prospective corn plantings at highest level since 1937 Continued from Page 1 expectations that ranged from 93.7 million to 95.7 million acres and averaged about 94.7 million acres. Paul Meyers, chief agricultural economist at Foresight Commodities Services, Inc., said the U.S.D.A. number suggested a 2012 corn crop above 14,000 million bus, based on harvested area of about 88.9 million acres at 161 bus an acre. To date the largest corn crop was 13,092 million bus in 2009, the result of 86.4 million planted acres (79.5 million harvested) and an average yield of 164.7 bus an acre. “The implication of the planted acreage estimate for the size of the 2012 crop hinges on yield expectations,” Mr. Irwin said. “On balance, a yield expectation of 160 bus for 2012 seems reasonable at the present time.” He cited three factors affecting corn yields, including long-term versus short-term trend yield data with longterm estimates favored, the record March warmth that will promote rapid planting and the recent drier trend over much of the Corn Belt the past 90 days. Farmers were off to a fast start with 3% of the corn crop planted as of April 1, slightly above 2% last year and as the 2007-2011 average for the date, according to the April 2 U.S.D.A. Crop Progress report. Corn in Illinois, the second largest growing state, was 5% planted as of April 1, with Indiana, Ohio and Nebraska all at 1%, compared with none planted in any of the four states last year or on average. Crop insurance restrictions prohibited farmers from planting too early in some cases. “Our recent estimate is that early planting may add up to 2 bus per acre to the U.S. average acres were down 1% from 2011, down 5% from 2010 and below the low end of the trade’s prereport estimates that ranged from 74.5 million to 76.7 million acres and averaged near 75.5 million acres. At least one respected analytical firm last week came out with an even higher forecast for corn planted area and also raised its forecast for soybean plantings. The favored status of corn was obvious in top-producing Iowa, where farmers indicated bus, which was about 150,000 bus below the average trade expectation and the lowest since 2004. “This March 1 inventory estimate implies that corn c o n s u m p t i o n d u r in g t h e more recent winter quarter was very large or that earlier stock estimates for the current marketing year were too high,” Mr. Irwin said in farmdocDAILY. “Our view is that the latter explanation is more likely to be true given livestock inventories, the depressing effect of warm winter temperatures on feed use, ethanol production to date and strong basis levels.” The U.S.D.A. March 1 corn and soybean estimates and recent forecast soybean production losses due to weather in South America, indicate both markets must move to prices that will ration old crop supplies, Mr. Irwin suggested. Since the reports came out on March 30 old crop May corn futures rallied about 54c a bu, or 9%, through last Tuesday, with new crop December up about 21c, or 4%. Old crop May soybeans gained 61c a bu, or 5%, during the same period, with new crop November up 74c, or 6%. “The market had sold off going into the reports,” Mr. Meyers noted. “That’s why the reaction was so strong.” He expects corn may lose acres to soybeans by the time planting is done, and that new crop corn prices will weaken. FBN Several surprises in key U.S.D.A. Prospective Plantings, Grain Stocks reports corn yield,” Mr. Irwin said. Earlier planted corn pollinates quicker, usually allowing the key stage to miss the hottest, driest weeks of summer. “Planted acreage is expected to be up in most states compared to last year due to expectations of better net returns in 2012 compared to other commodities,” the U.S.D.A. said. “Record corn acreage is expected in Idaho, Iowa, Minnesota, North Dakota and South Dakota.” Those potentially better returns appeared to sway farmers especially from soybeans and spring wheat, according to the U.S.D.A. data. U.S. soybean plantings indicated at 73.902 million they would increase area from 2011 by 500,000 acres, or 4%, to 14.6 million acres, and would reduce soybean area by 550,000 acres, or 6%, to 8.8 million acres. Other significant changes included Minnesota with corn area up 600,000 acres and soybeans down 200,000 acres from 2011 and Nebraska with corn up 450,000 acres and soybeans down 200,000 acres. But the “prize” went to North Dakota growers who indicated they would boost corn plantings from 2011 by 1.7 million acres, or 52%, to 3.4 million acres. The key number offsetting the high corn planting number was the U.S.D.A.’s estimate of March 1 U.S. corn stocks in all positions of 6,009 million RON STERK 36 FOODBUSINESS NEWS ® April 10, 2012

Table of Contents for the Digital Edition of Food Business News - April 10, 2012

Food Business News - April 10, 2012
F.D.A. rejects petition to ban bisphenol A
Finding savory flavors around the world
Prospective corn plantings at highest level since 1937
Table of Contents
Web Contents
Editorial - Steve Jobs as enticing model for food industry
Investment plans call for Burger King to go public
Consumers seeking deals to return to restaurants
General Mills ahead on product nutrition profile improvements
Test for milk allergens not as effective as thought
Craig Bahner to join Wendy’s as c.m.o.
Gluten-free offerings boost global snack introductions
Warne to lead Perkins and Marie Callender’s
Rich Products buys Canadian frozen dessert company
Michigan retailer acquires dairy production capacity
PepsiCo and Tingyi Holding finalize beverage alliance in China
US Foods acquires specialty importer
Market for food bars reaches $5.7 billion
Misinformation impacts beef demand
C.D.C. vitamin, nutrient data show progress
Burger King rolls out whopper of a menu change
Soup, salads showing strength on the menu
Daniel Saw to lead Campbell’s Asia business
Restaurant operator optimism on the rise
Market Insight - Prospective corn plantings at highest level since 1937
IFT Wellness 12 - Transparency vs. simplicity
Flavor Trends - Finding savory flavors around the world
Ingredient Innovations - Caramel color concerns prompt change
Colors by nature
New Food Products
Ingredient Market Trends
Ingredient Markets
Supplier Innovations and News - Egg replacer sales look to grow for Arla
Supplier Innovations and News - Systems reduce sodium in meat
Supplier Innovations and News - Perform spray drying tests in a single operation
Supplier Innovations and News - DuPont offers guar gum alternatives
Supplier Innovations and News - Pea protein enhances chocolate
Supplier Innovations and News - Barry Callebaut profits slip while sales rise
Supplier Innovations and News - Caramel color has more intensity
Supplier Innovations and News - Stabilize freeze-thaw products
Ad Index
Food Business in the News

Food Business News - April 10, 2012