Joe Victor is a Business Development Specialist with Minneapolis Grain Exchange, Inc., where he monitors cash grain activity and cash grain opportunities. He provides marketing advice through this blog.
Jun 28, 2010
Fundamentally, Allendale Inc. is preparing for an acreage increase from March to June for corn acres and a decrease for soybean acres. Historically, over the past six years, the average increase for corn acres from March to June has been 2.08%, with a range low of 0.2% in 2005 and range high of 3.8% in 2009. Each and every year, corn acres have increased in the June Planted Acreage report versus the March Prospective Plantings report. In 2010, Allendale suggests June corn acres will increase by 1% to a level of 89.707 million acres versus a March estimate of 88.8 million acres. The corn acres planted
are the second highest, dating back to 1944, with 2007’s 93.53 million as the leader.
Of the 18 prereport analytical groups surveyed, there are three that anticipate fewer corn acres in the June versus March reports. It must be noted there is a definite building trend for corn acres versus nearly flat for soybean acres. Combine more acres planted with a trend increase for yield, and we have the makings of record-breaking, sizable corn production with ethanol as a key contributor of demand.
Over the past six years, only last year did we see June soybean acres increase versus March. Of the most recent six years, we have experienced an acreage decrease from the March to June acreage reports by an average of 1.88%. Allendale Inc. suggests soybean acres will decrease by 0.7% to a level of 77.609 million acres in the June acreage report. The low has been a downward revision from the March to June report of 0.5% in 2008 and the high downward revision from March to June of 4.5%.
We can respect farmers' need to rotate corn and soybean crops as well as economics that suggest farmers can make more money per acre for corn versus soybeans.
Why does history continue to advance corn acres over the most recent six years and, most importantly, from the March to June reports?
We welcome your questions.........Joe Victor
The thoughts expressed and the basic data from which they are drawn are believed to be reliable but cannot be guaranteed. Any opinions expressed herein are subject to change without notice. Hypothetical or simulated performance results have certain inherent limitations. Simulated results do not represent actual trading. Simulated trading programs are subject to the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. Commodity trading may not be suitable for recipients of this publication. This is not a solicitation of the purchase or sale of any commodities. Those acting on this information are responsible for their own actions. Any republication, or other use of this information and thoughts expressed herein without the written permission of Allendale, Inc., is strictly prohibited. Allendale Inc. c2010