What To Expect From The USDA On Tuesday
If ever a market needed some direction this is it. Will we get it, or will it prove to be simply Wednesdays chip wrappings?
Suffice to say opinion is very much divided, just look at the ranges in estimates here:
There are some pretty big spreads there that's for sure, over 7 1/2 million acres on corn for example between highest & lowest.
As noted earlier the final planted figures have been higher for corn than in the March intentions report in seven of the last ten years. For beans it's been the opposite way round, in eight of the last ten years the final figure has been lower than the USDA's March number.
It seems strange to me that corn plantings should be only marginally lower than a year ago, given the huge turn around in sentiment that we have witnessed since then. Not to mention in the price of crude oil & the fact that something like 20-25% of US ethanol capacity lies idle whilst producers are filling for chapter 11 on a seemingly daily basis.
The argument being put forward is pretty much corn growers will stick with what they know, the renewable fuels mandate isn't going to go away so demand will still be there and fertiliser prices have come down somewhat (corn of course is a much more input-hungry crop). All compelling arguments I'm sure.
Suffice to say opinion is very much divided, just look at the ranges in estimates here:
Avg Est Range 2008
Corn 84.548 81.4-89.0 85.982
Soybeans 79.251 75.9-81.5 75.718
All Wheat 58.856 56.7-63.0 63.147
There are some pretty big spreads there that's for sure, over 7 1/2 million acres on corn for example between highest & lowest.
As noted earlier the final planted figures have been higher for corn than in the March intentions report in seven of the last ten years. For beans it's been the opposite way round, in eight of the last ten years the final figure has been lower than the USDA's March number.
It seems strange to me that corn plantings should be only marginally lower than a year ago, given the huge turn around in sentiment that we have witnessed since then. Not to mention in the price of crude oil & the fact that something like 20-25% of US ethanol capacity lies idle whilst producers are filling for chapter 11 on a seemingly daily basis.
The argument being put forward is pretty much corn growers will stick with what they know, the renewable fuels mandate isn't going to go away so demand will still be there and fertiliser prices have come down somewhat (corn of course is a much more input-hungry crop). All compelling arguments I'm sure.
