Allendale Yield Survey
 

  

 

Now that the USDA August WASDE and crop production reports are past and answers have been provided with regards to 2009 acres planted, potentially harvested and current yield expectations, Allendale Inc can shed more light on the present starch vs oilseed imbalance.

It’s very interesting to see how the present research data implies the 2009-10 days supply of corn numbers 46 in size which is equal to the days supply in the 2007-08 market year. The corn supply is just more than a week greater than the rice supply of 38 days. The number of days supply of corn after all demand is met continues to trek in a sideways pattern, rice continues in its downward slope since the 2005-06 market year while wheat sky rockets from its historic low of just 48 days in the 2007-08 time period when all three key starches congregated at extreme lows.

The build of the number of days of supply of wheat has corrected from an extreme low of 48 days just two years ago to a present level of 122 days approaching cushions the US has not experienced nearly a decade ago. Allendale suggest wheat days supply of more than four months is the dark gray cloud which hangs over the corn and rice futures and cash markets potential.

Just as plump is the present day’s supply of wheat, the day’s supply of soybeans remains anemic at best. As you are able to view via the graph, present days supply of old crop remains at less than a two week supply and even though USDA suggest the 2009-10 soybean production at a record large 3.199 billion bushels, after demand is stripped out it leaves us with less than a doubling of days of supply of 25 which mirrors 2007-08 and is a week less than the ten year average. It is interesting to note the days supply of world soybeans numbers just one day more than the ten year average of fifty nine, predicated Brazil and Argentina come through with more typical crops correcting from last years dry weather.

The next two months will likely help solidify just how corn, soybeans and rice crop production develops barring any major weather impact. Spread traders be alert to the present tightness in the number of days supply vs more than ample counterparts.

What are your thoughts with reference to the present situation of the day’s supply of corn, rice, wheat and soybeans? Does the USDA have an accurate estimate of forthcoming supply and demand for

2009-10? What will it take to remove the more than adequate supply of wheat in order to take price pressure off of corn? We welcome your questions.........Joe Victor

 

 

Allendale Inc welcomes any questions you may have by calling 800-551-4626 or

e-mail    research@allendale-inc.com

 

 

 

The present 2009 corn crop is in very select company in many ways as the industry awaits USDA’s additional acreage data results due to be released within its August 12^th crop production report. While the trade focuses on the likelihood of an acreage decrease in corn and a yield per acre increase resulting in larger end stocks, we must not lose sight of the lagging maturity for the 2009 corn crop.

Although the 2009 corn crop is unique with regards to the special acreage data collection and the fact the present good to excellent conditions as of 8-2-09 are 68% vs year earlier level of 66% and five year average of 61%, there is little to dispute the crop is in better than average health as it enters the down slope of the reproductive phase or more commonly referred to as the silking phase.

It is the percent silk where Allendale Inc’s research discovers just how unique this years corn crop is in relation to past years. As of Aug 2, 2009, this years corn percent silk registers 76%. Over the most recent fourteen years there are four other years when the percent silk is near the same level but it must be noted there is only one other year of the fourteen when the percent silk was under 80%. By comparison, the fourteen year average for the percent silk is 89%, a full thirteen percent higher than the present 76%. Allendale Inc looked at is there a connection between the percent silk and how the national yield per acre evolves via USDA crop production reports between the month of July to the January Annual? As you are able to view the graph, of the four years which were close to this years percent silk, the January annual USDA report had two years, when the bushel per acre yield was higher than the July crop production report and two years when the January annual yield was less.

More specifically the 1995 Jan annual yield was 5.2% less than the July estimate and in 1997 the yield was 3.1% less. In 1996 the January annual report the yield per acre was 3.3% higher than the July and in 2008 the yield was 3.7% higher than the July. Allendale Inc will note the only other year which had less than 80% of silk was 1996 and yet the January annual yield was higher than July but of great importance is how both 2008 and 1996 had later than average first freezes.

Implementing the percent change in yield for each year utilizing USDA’s present July supply demand estimates would result in the following end stocks vs the present USDA estimate of 1.55 billion bushels, 2008’s 3.7% yield increase suggest 2.006 billion bushels, 1996’s 3.3% yield increase suggest 1.957 billion bushels, 1997’s 3.1% yield decline suggest 1.164 billion bushels and 1995’s 5.2% yield per acre decline suggest end stocks of 908 million bushels.

To summarize, Allendale Inc fully anticipates USDA’s month of August WASDE is likely to decrease 2009 corn acres and anticipates an upward revision in the yield and result in end stocks which are similar to old crop levels. However based on the lagging maturity of this years corn crop, Allendale Inc must forewarn unless the major Midwest is to experience a second consecutive “late fall” this years corn yield is anything from made.

 What are your thoughts regarding these scenarios? Is the 2009 corn yield subject to a notable July vs January yield decline based on lagging maturity? Do you feel you have the appropriate amount of risk protection for your corn crop? We welcome your questions.........Joe Victor

 

Allendale Inc welcomes any questions you may have by calling 800-551-4626 or

e-mail    research@allendale-inc.com