Grainnet

by Grainnet Editor Greg Sullivan

On June 30, 2009, The USDA issued its Acreage and quarterly Grain Stocks reports.

CME Group held a press briefing on the reports from its Agriculture Trading Floor immediately following the issuance of the reports.

Participants included:

• Greg Wagner, AgResource, Chicago, IL.

• Brian Basting, Advance Trading, Bloomington, IL.

AgResource's Greg Wagner said that "the standout number here comes with the corn and the acreage number, which defies a lot of conventional thinking and is almost a full 3 million acres above what USDA projected."

"In regards to the corn market, this has been the third consecutive season the USDA has chosen or elected to use a sub-trend yield for corn because of weather conditions, so despite the rise in acres, there's still a long way to go before we have a crop made," Wagner continued.

"There are still challenges ahead."

"In the case of soybeans," Wagner said, "we're going to have a continuation of tight stocks."

Advance Trading's Brian Basting commented that "when we look at the change from the March Prospective Plantings Report, there was a lot of interest back in March that perhaps the missing acres would eventually show up, and this report shows we've found those acres."

"The corn acres number confirmed that the ideal planting conditions west of the Mississippi allowed producers to continue planting corn this spring, and those crops, at least to date, look in great condition," he added.

"This does lead us up to the weather market, though.

"This weekend is the 4th of July, and crops are lagging in maturity.

"One could argue, with the delayed maturity of the corn, that we'll need a bit of a late fall again this year."

Regarding the increase in estimated wheat acreage, Basting said "it was a bit of a surprise given all the challenges in the northern plains."

Commenting on stocks, Basting said "the stocks report makes things look bearish for corn and beans and more neutral for wheat.

"The feeding number for the quarter was a bit dissapointing and continues to confirm the stuggles that the livestock folks in particular are encountering.

"That's something to keep an eye on in the 2009-2010 crop year-our feed number could be vulnerable to some reductions down the road.

"We really need to see a healthy bean crop year in 2009 to rebuild stocks," Basting said.

For more information, call 312-930-8189.

See Related Websites/Articles:

• USDA
• CME Group
• Acreage Report
• Grain Stocks Report

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