US 2013 corn plantings to match 2012's record level

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Publish time: 8th August, 2012      Source: www.cnchemicals.com
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August 8, 2012

   

   
US 2013 corn plantings to match 2012''s record level
   
   

   

As CF Industries flagged hopes for prospects after a quarter in which its results missed Wall Street forecasts, US farmers are to match this year''s huge corn sowings in 2013 to capitalise on high prices.

   

   

Having taken 75 years to return to 96 million acres, US corn plantings will stay there next year, according to CF, which said its forecast was implied by the level to which prices of the grain have rallied to.

   

   

Chicago''s best-traded December corn contract closed at US$8.00 ?? a bushel on Tuesday (Aug 7), up nearly 60% since mid-June, when fears for the impact of US drought on yields sparked a rally in grain and oilseed prices.

   

   

"Tight global grain stocks have supported strong prices and created conditions for continued high crop plantings," Stephen Wilson, the CF Industries chairman and chief executive, said.

   

   

With strong US sowings ahead for corn, a nutrient-hungry crop, CF was upbeat over the region''s demand for nitrogen fertilisers, which make up the great majority of the group''s portfolio.

   

   

Indeed, demand for ammonia would be accentuated by a run-down in North American stocks of the fertiliser to "at or near historically-low level", following a strong spring sowing season.

   

   

This shrinkage in inventories had created a "significant need, as well as potential challenges," to restocking the region''s supply chain for the nutrient. However, while forecasting "strong demand" too for urea, the other main form of nitrogen fertiliser, CF also acknowledged a headwind from the US drought, in its impact on autumn planting plans.

   

   

"Dry weather across the US wheat growing regions may delay fall fertilisation," CF said.

   

   

In the southern state of Texas, where the autumn sowing window is opening farmers are awaiting "rain and cooler temperatures as small grain seeding preparations continued" last week, USDA officials said.

   

   

The comments came as CF unveiled a 24% rise to US$606.3 million in earnings, or US$9.31 per share, for the April-June quarter. However, excluding one-off items, earnings per share came to US$8.65, below the US$8.91 that Wall Street had expected.

   

   

Revenues fell 3.7% to US$1.74 billion, also missing market expectations of a US$1.95 billion figure. The drop in revenues reflected the impact of the early start to the US spring sowing season, which squeezed supplies of urea available for sale in the April-June period, when demand for ammonia eased after an unusually early seasonal rise.

   

   

CF shares closed up 1.3% at US$206.07 in New York, within range of the record high of US$208.43 set three weeks ago.