Unseasonably Warm Temps Have Corn Planting Estimates on the Rise

March 21, 2012 04:34 AM
 

What Traders are Talking About:

* Corn acreage estimates on the rise. Temps are expected to moderate from recent record levels, but remain well above normal across the Corn Belt through next week. Periods of rain are forecast to accompany the unseasonably warm temps, which will help recharge soil moisture. As a result, the spring planting season is expected to get off to a quick start, which typically favors corn planting. Some corn is already being planted in southern areas of the Corn Belt and there are reports of some emerged corn. Pro Farmer crop consultant Dr. Michael Cordonnier says because of the early start to the planting season, he's expecting planted corn acreage of 95.5 million acres. The two factors that could limit corn seedings are a possible shortage of corn seed (or delayed delivery of seed) or a return of cold weather.

The long and short of it: Some are already expecting that corn acres will increase from what USDA reports in the March 30 Prospective Plantings Report. That will limit near-term buying interest in corn futures and could put additional pressure on the market.

* Chinese commodity imports surge in February. Chinese imports of raw materials increased sharply last month. For agricultural products, corn imports were 502 times greater than year-ago, soybean imports rose 65% and wheat imports were more than triple last year's level. Meanwhile, state-run China National Grain and Oils Information Center says first-half 2012 soybean imports are likely to hit 29 MMT -- a 25% increase over the first six months of last year. The positive import data comes less that a day after the investment world was spooked Tuesday by talk of slowed economic growth in China and the likelihood of decreased Chinese commodity imports.

The long and short of it: China remains the key when it comes to global commodity trade. As the Chinese economy goes, so go Chinese commodity imports.

* China promoting more rural lending. China's central bank is taking steps to promote more lending in rural areas. The People's Bank of China announced an additional 379 branches of the Agricultural Bank of China (Agbank) will have preferential bank reserve requirements (2 points under Agbank's 20.5%) as of March 25. Currently, 565 branches of Agbank are subject already subject to the preferential reserve rates.

The long and short of it: China's willingness to lend in rural areas shows the importance of agriculture to the well being of the country and the need for increase production.

 

Follow me on Twitter: @BGrete


Need a speaker for a seminar or special event? Contact me: bgrete@profarmer.com

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close