As we approach USDA’s March 31^st “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 31^st “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 31^st. 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 31^st is upon us. ….Joe Victor

 

 Contact your Allendale broker with alternative marketing strategies, utilizing “The Evaulator”.

 800-551-4626

 

 

 

 

 

 

Allendale Inc recognizes 2009 new crop spring wheat plantings may not be without major challenges. According to a Farm Service Agency official within the state of North Dakota, estimates as many as one million acres of farm land may not be planted because of weather related problems. March 10^th as much as 10 inches of snow fell on already saturated soils.

The vast majority of the private weather forecasting agencies which Allendale Inc follows suggest if there is a specific region which may have cold, wet weather delay spring time fieldwork for 2009, it is the north’s North Dakota, South Dakota and Minnesota. More specifically it is North Dakota which has received 200% of normal precip in the most recent 90 days. The North Dakota average snow depth as of March 1, 2009 recorded at 16.9 inches compares to year earlier levels of 3.6 inches with 2002-2007 average March 1 amount of 5.38 inches. Add to its plight, North Dakota is forecasted to remain cooler and wetter than normal from March through June.

How important is North Dakota with regards to the wheat industry? In two words, extremely important! North Dakota typically supplies 44% of the nation’s spring wheat crop (excluding durum) and accounts for 64% of the nation’s annual durum wheat supply.

Interesting to note is the present end stock projection for US durum wheat of 21 million bushels is 32% less than the most recent ten year average, spring wheat end stocks are 4.2% fewer than the ten year ave and soft red winter wheat stocks are 60% larger than its most recent ten year average.

Allendale Inc advises a market play of spreading new crop September Minneapolis spring wheat futures vs Chicago Board of Trade, new crop July wheat futures. In an uptrend since late December 2008, Present resistance is 80 cents premium the Sept MGEX spring wheat futures, with trend line support of  70 cents. Our official recommendation is to enter the spread at 70 cents, risk to 58 cents and use an objective of 92 cents.

Allendale must add it would not recommend spreading the new crop MGEX spring wheat futures against the KCBT new crop futures as hard red winter wheat is experiencing its own weather related problems. Allendale would also like to add for the potential for old crop and new crop basis strength for spring/durum wheat crops.

 

Allendale Inc would appreciate your thoughts and ideas regarding the potential for a rally in the spring wheat futures given weather related projections and current stock situation. ….Joe Victor

 

 Contact your Allendale broker with alternative trade strategies. 800-551-4626

 

 

 

 

 

 

McHenry, Illinois based analytical research/introducing brokerage firm Allendale, Inc. announces results of its 20^th annual farmer survey. The survey, which included participation from 23 states, was said to estimate the following 2009 planted acreage, in millions:

 

Corn                              85.406                  -.576

Soybeans                       80.439               +4.721

Total Wheat                  57.977               -5.170

Winter Wheat                42.147                -4.134

Durum Wheat                  2.597                  -.134

Other Spring Wheat       13.233                  -.902

 

Corn planting intentions of 85.406 million acres represents the third largest planted acres in the past 60 years. Acres will decline for two years in a row from the 2007 level of 93.527. Peak planted acres of 113.024 million occurred in 1932. Using Allendale Inc. 156.95 bushel/acre trend yield, it would imply production of 12.240 billion bushels which is the second highest ever.

 

Soybean planting intentions of 80.439 million acres are a new record. In just two years, acreage will have jumped 15.7 million. Using Allendale Inc. 42.44 bushel/acre trend yield, it would imply soybean production of 3.367 billion bushels, a new record. From last year's levels it would be a jump of 408 million bushels.

 

Wheat acreage is estimated at 57.977 million acres. This is the third smallest in the past 30 years Using Allendale Inc. 43.95 bushel/acre trend yield, it would imply wheat production of 2.170 billion bushels versus last year's 2.500 billion bushel production.

 

Allendale Inc would appreciate your thoughts and ideas in response to its 20^th annual farmer driven survey. Have Midwest farmers left enough room for major adjustments to their acreage intentions once they are actually in the field or are their intentions solidified? Based on acreage intentions described above, Allendale has made adjustments to its corn, soybeans and wheat, supply/demand and old crop/new crop marketing plans. If you have any questions about marketing alternatives, give us a call 800 551 4626….Joe Victor

 

 Contact your Allendale broker with alternative strategies. 800-551-4626

 

 

 

 

 

 

Allendale Inc explained in a recent research article two (Oklahoma and Texas) of the top four US winter wheat producing state’s crop condition ratings are far less than desirable. With #1 wheat producing state of Kansas now updating its weekly condition report for the second week, it may come as little surprise of a down grading of its fair, poor and very poor ratings.

National ratings for winter wheat may not become known until April 6^th to provide an overview of the potential production for 2009. However Allendale Inc suggest it may in fact be the KCBT’s new crop July futures which may assist in leading a spread verses CBOT’s July corn futures into a short term rally.

Fundamentals point towards a deteriorating crop in large part to various degrees of drought within the southern Plains and yet immediate forecast (03/10) suggests a small chance for moisture in the next 6 to 10 days in the much-needed areas of the HRW wheat belt. For 2009/10 Allendale’s research does suggest for each one bushel decline in national yield, production could drop by 48 million bushels.

According to the Climate Prediction Center much of Texas and Oklahoma wheat country requires up to three inches of rain in order to bring the Palmer Drought Index to neutral status.

Private weather service’s long range forecast, continue to advertise the March – April bias as one of warm and drier than usual for the southern Plains.

As evidenced by the KCBT July Wheat vs the CBOT July Corn spread note the potential near-term bottom of $1.89 premium the July wheat and equally important is how the spread was able to break up through the psychological resistance barrier of $2.

Allendale Inc must point out technical traders may view the recent $2.42 high to $1.89 low and look to $2.15 as 50% retracement resistance. Equally important,  the technical trade may micro view the most recent spread trade of $2.10 high posted on March 6^th vs the Feb 26^th $1.89 low and use 50% retracement of $2 as support.

Based on overall bullish developing new crop wheat fundamentals, Allendale Inc advises to implement the KCBT July futures vs the CBOT corn spread shortly after the 9:30 am futures opening after issuance of the March USDA World Ag and Supply Estimates report on Wednesday. If USDA releases a neutral report for the grain end stocks we would advise entering the spread at $2.03 premium the KCBT July wheat, risking $1.87, with an objective of $2.34.

Allendale Inc would appreciate your thoughts and ideas regarding the potential supply decrease within the key southern Plains and the impact it may have on the potential spread discussed….Joe Victor

 Contact your Allendale broker with alternative trade strategies. 800-551-4626

 

Note: Allendale to release its results of 20^th annual farmer driven acreage intention survey, March 13^th!

 

 

 

 

 

Allendale Inc is well aware of the fact two of the top four US winter wheat producing state’s crop condition ratings are far less than desirable.

Traditionally Texas ranks as the nations number four winter wheat producer with Oklahoma ranked second. As you are able to view the very poor wheat conditions within the state of Texas have nearly doubled since the beginning of the year and now stand at 38%. Over the most recent three weeks, the state’s wheat rated to fair and poor have remained mostly sideways. Most notably is the fact the states fair, poor and very poor wheat conditions now combine to total 90%, leaving only 10% in good to excellent status. Decision time is upon the state of Texas as spring field work moves forward, farmers are deciding whether to allow its winter wheat to pull out of its nosedive or replant with an alternative crop.

Number two US producer Oklahoma is also off to a less than enthusiastic 2009 beginning. The Sooner states amount of poor wheat has more than doubled from 17% to a present level of 29%. While Oklahoma’s condition of wheat rated fair has slipped 5%, its very poor conditioned wheat has increased from 3% to 13%. As of the completion of the month of February, the state now has 77% of its wheat rated fair, poor to very poor.

Weather conditions and forecast are less than optimistic for the Southern Plains as two week forecasted temps suggest swings of more than 25 degrees which may promote heaving while the present drought monitor suggest more than periodic rains will be required to dig out of harsh conditions. Principle key winter wheat producing states of Kansas, Oklahoma, Washington and Texas have a degree of abnormally dry to severe drought.

 Contact your Allendale broker with alternative strategies. 800-551-4626

 

 Allendale's 20th annual acreage survey, join in, receive the results March 13th