"US farmers' huge bet on corn had better pay off"

Get rid of the EPA's ethanol mandate.
From Agrimoney:

US farmers' bet on yellow had better pay off.

Corn growers in the world's top producing country were on Friday revealed to beplanning to plant 95.9m acres with the grain – the largest corn acreage in 75 years.

Which, on the face of it, is good news. Consumers worldwide need a big American corn harvest to rebuild depleted inventories.

But the extent of the switch into the yellow grain carries the risk of being too much of a good thing.

Ideal situation

OK, it could set up the world for far better supplies.

Assume an 8% abandonment rate, and the yield the US Department of Agriculture is predicting for those acres that make it through, and the crop comes in above 14.4bn bushels, a clear record.

Ending stocks will end 2012-13 at some 1.7bn bushels, according to US Commodities, around the levels of 2009-10.

Buyers may hope so. US supplies were ample enough to keep prices below $4 a bushel for most of that season.

Yield threats

But the risk is that yields fall short of that USDA forecast, as they have done for both the last two crops – landing America with disappointing supplies....MORE