Acreage End Stocks
Mar 24, 2009
As we approach USDA’s March 31st
“Planting Intentions” report, Allendale Inc provides an outlook which includes private estimates for acreage as well as potential for end stocks for both corn and soybeans. As you are able to view via the graph
, earliest private ranges have narrowed in the potential corn acreage to a range of USDA’s February Outlook Conference high of 86 million acres to a low of 81.4 million acres. This range compares to an early 2009 estimated range of 80 to 90 million acres which both low and high range was estimated by international seed corn companies. Using Allendale’s projected 2009/10 demand prospects, USDA’s 86 million acres planted would project end stocks of 1.38 billion bushels and the low end of 81.4 million acres planted may project 2009/10 end stocks of 721 million bushels. It is Allendale’s suggestion end stocks approaching and breaching 1 billion bushels may set the stage for a futures rally and new crop basis strengthening. Allendale’s planting estimate of 85.41 million acres, projects 2009/10 end stocks of 1.295 billion bushel, 26% less than projected 2008/09 end stocks.
Equally important will be USDA’s March 31st “Planting Intentions” for 2009 soybeans and according to the data above, the over whelming consensus suggest a bearish outlook for new crop soybeans. Of the six pre release estimates, five private firms estimate a relatively tight acreage estimate of 80 to 81.5 million acres with projected 2009/10 end stocks in a range of 508 to 571 million bushels. This projected range, compares to present old crop stocks of 185 million bushels.
Allendale suggest existing pre release estimates are bearish to new crop soybean futures and fall basis levels while supportive to new crop corn futures and basis leading into March 31st. Given the month of March 13% rally in new crop soybeans, immediate new crop marketing strategies must be implemented and let’s not ignore the 12% month of March rally for new crop corn. Based on Allendale price projections, new crop futures are approaching price objectives for corn, soybeans and wheat.
Allendale Inc would appreciate your comments regarding the potential for any surprises USDA may be armed with when March 31st is upon us. ….Joe Victor
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