Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
2010 Preliminary Crop Production Forecasts
An important date lies just ahead for the grain trade. March 31 marks the release of USDA’s survey based Prospective Plantings and the 1st quarter Grain Stocks in All Positions reports. These reports are important because they will set the stage for commodity trading going into the spring and summer months, coinciding with the time period that we generally experience seasonal rallies in the corn and soybean markets. The looming questions going into the reports are the number of 2010 corn and soybean acres famers say they intend to plant and whether the stocks report suggests lower or higher ending stocks for the ‘09/‘10 marketing year? The size of the production estimates and the amount of stocks on hand will help to determine the extent of the expected seasonal rally. Another factor likely to determine the extent of a seasonal rally is the weather. Although still early, saturated soils throughout the Corn Belt may prove to be reason to remain cautiously optimistic concerning commodity prices this spring and early summer. The nation’s farmers are not expected to risk delayed planting for corn this year considering the high moisture problems that were prevalent in the 2009 U.S. corn harvest.
Informa Economics estimates 2010 U.S. corn acreage at 88.427 million acres; soybean acreage at 78.629 million acres; and all U.S. wheat acreage at 53.655 million acres ahead of the March 31 report. Allendale Inc. estimates planted corn acres at 90.2 million acres; soybean plantings at 79.1 million acres; and all wheat acres at 53.4 million acres. The markets will settle on trading USDA’S projections that will be released next Wednesday.
Market Strategy
Currently, initial support for May corn futures lies at $3.61. If May corn closes below that level then the next level of support is at $3.51. Support for May soybeans is at $9.58. Both markets are trading at or below support levels this morning. If broken, then we are likely to see nearby corn and soybean prices moving lower in the near term.
New crop Dec ‘10 corn futures are currently trading at $3.90 per bushel (12 cents lower); Nov ‘10 soybean futures at $9.28 (11 cents lower); with July ‘10 SRW wheat futures at $4.86 per bushel (13 cents lower than last week’s recorded prices). The lower prices are attributed to the harvest of the Southern Hemisphere corn and soybean crops; harvest progress in the Northern tier of the U.S. Corn Belt; and a drier 7 to 10 day forecast for the Midwest. For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.