Surging ethanol production quickly skewing 2006 plantings.(CROPS)

Kiplinger Agriculture Letter, The, June, 2006

Surging production of ethanol is quickly skewing 2006 plantings.

There'll be a lot more corn than was expected in March, when USDA surveyed planting intentions. With exports and ethanol output expected to generate record corn usage next year, the price outlook is strong... prices near $2.50/bushel into 2007, up from less than $2 in recent years. So farmers have added up to 2 million acres to their earlier field plans, after high output costs had fostered earlier estimates for a big cutback.

But seeding more corn for ethanol and exports will trim soybeans. Farmers told USDA in March that they would plant nearly 77 million acres of soybeans, a record. And though new biodiesel plants will hike demand for soy oil for the long term, most of the new plants...

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