Soy sowings up near record; corn crop squeezed

WASHINGTON (Reuters) - U.S. farmers will sow a near-record 74.8 million acres of soybeans this spring, the government said on Monday, preventing a soy shortage but curtailing the corn crop when ethanol production is booming.

Corn plantings were forecast at 86 million acres, down 8 percent from 2007. Analysts said corn (maize) demand was so strong, there would be a raid on the U.S. stockpile next year.

Jack Scoville, an analyst with the Price Futures Group in Chicago, said Agriculture Department data pointed to "a big problem in the coming year" in corn.

This year's corn crop could total 12.2 billion bushels, the second largest on record, although smaller than 2007's record, and soybeans could yield 3.1 billion bushels, the No. 3 crop, according to Reuters calculations. USDA will make its first harvest projections in May.

Based on a survey of 86,000 growers, USDA said, "many growers intend to plant more soybeans this year due to high prices and strong demand for soybeans." The nationwide survey was conducted in early March.

Soybean plantings of 74.8 million acres would be 1 percent below the 2006 record of 75.5 million acres. Although down from 2007, corn plantings would remain at unusually high levels, USDA said.

Wheat plantings of 63.8 million acres, up 6 percent, could produce a crop of 2.3 billion bushels. USDA said cotton plantings would tumble by 13 percent, to 9.39 million acres, the smallest plantings since 1983.

"Soybean prices have been the highest lately, so farmers are planting more soybeans," private consultant John Schnittker said.

The U.S. corn surplus is large enough to cushion a moderate gap between the 2008 crop and demand from livestock feeders, exporters, food makers and the ethanol industry, Schnittker said. By some estimates, corn usage will run at 13 billion bushels this year and next.

More than 4 billion bushels of this year's corn crop will be used to make ethanol, USDA projected, up 900 million bushels from the 2007 crop.

Overall, USDA said, an additional 5 million acres will be planted to grain, cotton and soybeans this year, up 2 percent from 2007 at 252.75 million acres. USDA says high prices will encourage double-cropping of wheat and soybeans and conversion of fallow land to crops.

Darrell Good, an agricultural economist at the University of Illinois, said he expected "extremely tight" corn supplies, if this year's corn crop lags too far behind demand.

"We'd have to see some liquidation of livestock numbers," Good said by telephone. "Ultimately, we have to figure out some way to plant 90 million acres," his benchmark for assuring adequate corn supplies.

Iowa would have the largest increase in soybean plantings, up 1.25 million acres, and Nebraska would have the second-largest increase, 1.2 million acres.

Corn plantings would fall by 1 million acres in Iowa and by 800,000 acres apiece in Indiana and Minnesota.

Cotton growers planned to reduce plantings in nearly every state. Texas, the No. 1 cotton state, would plant 4.7 million acres, down 200,000 acres from 2007.

USDA's figures for corn plantings were lower than expected by traders in Chicago and the likely soybean figure was larger than expected. USDA listed more corn and soybeans in U.S. grain bins as of March 1 than traders expected.

Futures prices for soybeans plunged by 70 cents a bushel, the maximum allowed in one day, at the Chicago Board of Trade. May soybeans were locked at $11.97-1/4 a bushel. May corn closed at $5.67-1/4 a bushel, up 6-3/4 cents. July wheat ended the day at $9.37 a bushel, down 59 cents.

(Reporting by Charles Abbott; Editing by Walter Bagley)