[Farmmarketnews] Todd Austin Grain Commentary

Wed Apr 6 16:38:23 EDT 2011

Wednesday April 6, 2011

Commodity
Period
Price  
Weekly Movement

Corn CBOT
May. 
7.63  
↑
99 ¾ 
cents

Soybeans CBOT
May.
13.76 ½  
↑
4 ½ 
cents

Wheat CBOT
May. 
7.82 ¼   
↑
55  
cents

Wheat Minn.
May. 
9.54 ½ 
↑
68 ½      
cents

Wheat Kansas
May. 
9.39 ½  
↑
77 ½     
cents

Canadian $
Jun. 
1.0404 
↑
126
points

CORN
Since last summer, corn futures have more than doubled, due to both strong
export and domestic demand from ethanol and livestock. Even though the U.S. crop
was the third largest on record, corn inventories continue to shrink. As of
March 1, inventories were down 15 percent from a year earlier.
Average trade estimates expect the next USDA report to project ending corn
stocks at 595 million bushels, compared to 675 million in March; this will bring
the carryout to use ratio to 4.3%. Corn continues to be used at an incredible
pace.
The USDA's survey of U.S. farmers found they intend to plant 92.2 million acres
of corn—the nation's biggest crop. With normal weather, the acreage that U.S.
farmers intend to plant should produce between 13.6 billion bushels and 13.8
billion bushels of corn in the fall. Any delays caused by unusually wet or cool
weather could force farmers to plant less corn.
SOYBEANS
According to the 2011 Prospective Plantings report by the USDA, U.S. farmers
will plant 76.6 million acres of soybeans this year. USDA estimates this year’s
soybean crop may be 1 percent lower than last year. However, if the numbers
hold, the 2011 soybean crop could be the third-largest planted area on record.
Last week's USDA data was, on the face of it, bullish for soybeans too, but
sentiment over the oilseed has been depressed by a lack of Chinese import
orders, and by expectations that Friday's World Agricultural Supply and Demand
Estimates will lift forecasts for world production.
WHEAT
The wheat – corn spread continues to tighten in an attempt to increase new crop
wheat feeding to help temper corn feed demand. The grain market is related
through animal feed because producers tend to switch from corn to wheat and
right now wheat is supported by corn. SRW feeding has ranged from 34 to 161
million bushels in past years.
U.S. wheat conditions have fallen to their lowest ratings since 2002, about 37
percent of the U.S. crop was good or excellent, down from 65 percent a year
earlier. The USDA has downgraded the crop ratings for critical growing regions
following persistent dry conditions and there are fears of production losses if
conditions do not improve in the near future.
Drought in the hard red winter wheat areas of the U.S. continues. Forecasts
show little moisture into mid April, which set the crop up for permanent damage
leading to yield loss or abandonment. Some of the trade are estimating HRW
production at 848 million bushels versus 1.02 billion bushels last year.

Current contract prices for April 6, 2011 at the close are as follows:
SWW at $285.67 per tonne ($7.04 /bu.), SRW at $256.90 per tonne ($6.99 /bu.),
HRW at $272.80 per tonne ($7.42 /bu.), and HRS at $327.29 per tonne ($8.91
/bu.).
John Jordan
Editor, AgriLink and Farm Market News
University of Guelph, Ridgetown Campus
Tel. 519-674-1500 x 63577

Fax. 519-674-1530
E-mail: jjordan at ridgetownc.uoguelph.ca 
AgriLink website : www.ridgetownc.com/agrilink 
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