Allendale Wrap-Up DATE \@ "M/d/yyyy" 3/31/2009
Corn: We only have a few hours until what could be the biggest report of the year is released. We have posted average guess, as well as Allendale’s estimate, on the Grain Fundamentals I page to assist you. For now, we are generally neutral on corn prices. Even our acreage guess, near the higher end of the range of estimates, implies a fall in ending stocks. Also, there is the threat we may not get all of it planted with all this excess moisture recently.
Soybeans: As Argentina farmers stopped striking, we have taken some premium out of the market. That has left the trade stewing over what could be bearish acreage numbers for tomorrow morning and as a result the good decline in prices in the past five days.
Argentina: The Agriculture Secretariat released the first official government estimate of soybean production this afternoon. They estimate the soybean crop from 37 to 39 million metric tonnes. That is still a bit lower than USDA’s current 43 mmt estimate. That discrepancy converts to 147 to 220 million bushels. On Friday the Buenos Aires Grains Exchange just estimated 41.2 mmt. That may be enough to give the overnight trade a small bounce.
Wheat: USDA typically does not make significant changes to winter wheat acres. They already released that estimate in the Winter Wheat Seedings report back in January. Instead, we now have some questions to answer on spring wheat ground. The average trade guess suggests farmers will plant 496,000 fewer acres to spring wheat (classified as other spring). The estimates on the Grain Fundamentals I page suggest another 109,000 decline could be in store for durum. We will be watching these acres closely as North Dakota accounts for half of those plantings. It is likely USDA’s report will not take into account any sort of high moisture or flooding impact yet…Rich Nelson
Rich Nelson is the Director of Research at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com
