Nogger's Blog

30/03/12 -- We were expecting fireworks, and as usual Uncle USDA didn't disappoint, buying the biggest box in the shop and deciding to let them off all at the same time.

For corn they gave us a planting number even higher than the highest trade estimate, close to 96 million acres of the stuff. But those acres have to come from somewhere, and soybeans and wheat are seen providing them with soybean plantings seen at 73.9 million acres, lower than the lowest trade estimate and 1.1 million below the USDA's February Outlook estimate. All wheat acres are pegged at 55.9 million, towards the low end of what was expected and more than 2 million below last month's Outlook Forum.

For stocks, all three came in below the average trade guess.

The vibe now is that this is very bullish for soybeans per se, especially when you consider with a shudder what the market might do if and when we get a weather scare or two across the summer.

For corn it's a mixed bag, for sure almost 96 million acres is bearish, but we have an even tighter old crop situation than we had before. Any weather scares across the summer could also impact on production potential here, and don't forget that the USDA have already set the bar pretty high for corn with an ambitious return to trendline yields.

There are already some saying that these figures are a little out of date. Corn has fallen 50 cents this month, whilst beans have risen 33 cents. Some of these corn acres are already in the ground though thanks to the near ideal early spring weather.

For wheat we have 1.5 million more acres than last year, but that isn't as much as the trade was expecting. We also have the spectre of European production getting cut, with Coceral today coming out with a soft wheat estimate 2.1% down on last year at 126.76 MMT.

The vibe is for soybeans to trade 50 cents higher at the opening. Corn is seen 20 cents higher on old crop and even new crop could get dragged higher despite the monster acreage number. Wheat is called 15-20 cents higher, there are some big shorts around on the latter don't forget.