History will clash with hard economics on Thursday when US farm officials unveil long-awaited estimates on US crop inventories and sowings, which for corn could come within 530,000 acres of setting a post-war high.
Standard Chartered raised the bar further on estimates for this year's US corn area, saying the top producing country would sow 93m acres with the grain - adding 4.8m acres, or an area bigger than Denmark or Switzerland.
"A figure below 93m acres should be seen as bullish for corn, given extremely low 2011-12 US start-of-season stocks, high ethanol output and pipeline demand from Asia, particularly Japan but also China," the bank said.
The estimate was above the top estimate of 92.6m acres, from broker US Commodities, in a Thomson Reuters poll closely referenced by traders, and a consensus forecast of 91.8m acres.
'Clear advantage'
Nonetheless, it gained some credence in the market. Tim Hannagan at PFG Best, while forecasting a number nearer the average, acknowledged that "corn's profitability could see farmers plant 5m-6m acres more" this year than in 2010.
New crop prices suggested that for growers planting corn or cotton will receive an extra $1,000 per hectare in revenues than those sowing soybeans, Australia & New Zealand Bank, while failing to come up with its own seeding estimates.
Factoring in costs, such as the additional fertilizer that corn requires, farmers' extra returns from corn over soybeans are $158 an acre, in line with those in 2007 when US sowings of the grain hit 93.5m acres, the highest since 1944.
"In respect to farmer crop economics, corn has a clear advantage over soybeans for much of the US Midwest," Macquarie said, while itself pegging sowings below consensus at 91.4m acres.
Lessons from the past
Indeed, the bank pointed to the ratio of soybean to corn prices, at 2.2, being above the 1.9 reached four years ago that helped trigger the jump in sowings of the grain at a big expense to the oilseed.
And, at Chicago-based North America Risk Management Services, Jerry Gidel cautioned that history suggested that the US Department of Agriculture would come out of with a corn area figure below consensus.
"The trade has a tendency to overestimate corn acres on this first seeding report of the year, with only five times in the last 20 years has the USDA's farmer survey projected a higher level than the trade's average," Mr Gidel said.
For soybeans, which analysts over average see sowings falling some 500,000 acres to 76.9m acres, the record is mixed in terms of over- or underestimation, but the differences from consensus tend to be "more dramatic", coming in above 2m acres in four of the last five years.
'Big reports'
Thursday's stocks and sowings reports are being viewed with particular interest this year because of the thinness of US supplies, which exaggerates the importance of even small changes, and a dearth of other news of late, Don Roose, president of broker US Commodities, said.
"The trade has not had any big new news to work off," Mr Roose said.
"Here we have a big estimate of what demand was, and what potential supply is, and from the [US] government ?the people that count."
The March sowings reports are a good predictor of the direction of plantings, whether a crop has become more or less popular with growers, even if the final area figures tend to differ from initial estimates, he added.
