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Economic Forecasts

Eager World Awaits American Crop Bounty

A huge U.S. harvest is in the works in 2011, in the face of dwindling stocks of major field crops and fears of global shortages. High prices will reward farmers, who will seed up to 9 million acres more in 2011 than last. Demand and price will dictate what gets planted most.

Corn

Acres planted in 2010: 88.2 million
Projected acres planted in 2011: 92.5 million
Fall price 2010: $4.55/bu.
Projected fall price 2011: $5.80/bu.

If weather permits and demand jumps before farmers plant, corn acreage will jump by as much as six million acres in 2011. With an average 160 bushels/acre yield, that could produce 1.5 billion additional bushels to meet food and ethanol demands. Prices will remain strong despite increased supply.

Soybeans

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Acres planted in 2010: 77.4 million
Projected acres planted in 2011: 78 million
Fall price 2010: $11/bu.
Projected fall price 2011: $13/bu.

Record acreages are in the cards and demand is robust. Exports of soybeans plus soy oil and meal are hopping, and Congress goosed demand by extending the biodiesel fuel blender subsidy. Another plus: Soft winter wheat will be harvested in Midwestern and eastern states by early summer and many fields reseeded with soybeans.

Cotton

Acres planted in 2010: 11 million
Projected acres planted in 2011: 12.6 million
Fall price 2010: $0.80/lb.
Projected fall price 2011: $1.50/lb.

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Cotton plantings will soar to a five-year peak in 2011, if enough rain comes to parched Texas, which grows half of all U.S. cotton, and if conditions in the rest of the South allow normal planting. If Texas gets rain, acreage will expand 15% in 2011 on top of the 20% jump in 2010. There’s a strong market: Exports to Asia are up 118% since last July, compared with a year earlier.

Spring Wheat

Acres planted in 2010: 13.7 million
Projected acres planted in 2011: 14.2 million
Fall price 2010: $6/bu.
Projected fall price 2011: $8.70/bu.

Wheat acreage will rise only modestly, with increases in Midwestern and Eastern states offset by farmers switching to higher-value crops in other areas.

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Rice

Acres planted in 2010: 3.64 million acres
Projected acres planted in 2011: 3.1 million
Fall price 2010: $11.50/cwt.
Projected fall price 2011: $11/cwt.

Rice acreage will fall by 10% to 15% from 2010’s huge crop. Big stocks on hand will keep rice prices in the moderate range, despite strong global demand and sales.

The Known Unknown

Drought on the southern Plains is withering the winter wheat and looming over spring planting. Corn Belt fields mired in mud are likely because of heavy rains, thwarting planting efforts. Late seeding would surely slash crop acreage results.