What is in this article?:
- Corn prices not reflecting acreage questions
- Acreage uncertainty
- The markets are supplied with a steady flow of data on consumption in some markets, particularly the export markets and the ethanol market.
- Less frequent information is available about consumption in other markets, particularly the domestic feed market.
- For corn, the available data point to a continuation of a high rate of domestic consumption and a slow pace of export shipments.
"Considerable uncertainty about the magnitude of acreage of spring-planted crops will persist for at least another month. Uncertainty about total planted acreage is magnified by the difficulty in estimating the amount of acreage that has been lost for the year due to flooding," Good said.
In addition, it is difficult to evaluate how many acres, particularly of corn, will be lost to the prevented planting provisions of the crop insurance program. Several million acres were likely still not planted as of May 29.
"In addition to uncertainty about total planted acreage, the mix of crop acreage is also difficult to anticipate, with some intended corn acreage likely shifting to soybeans after the first week of June," Good said.
Upcoming USDA reports will provide some of the currently missing information for the crop markets. The June 9 Crop Production report will provide a new forecast of the size of the U.S. winter wheat crop. Updated forecasts of U.S. and world supply and consumption prospects will be released on the same date.
"We do not anticipate any changes in the projections for the 2010-11 or 2011-12 marketing years for U.S. corn. There is some chance of a small reduction in the projection of U.S. soybean consumption for the current marketing year. For wheat, changes for the 2011-12 marketing year will follow the new winter wheat production forecast," Good said.
The USDA's June 30 Grain Stocks and Acreage reports will provide the most important fundamental information for all three crops.
Consumption data and a strengthening basis suggest that corn inventories are getting increasingly tight. The report of planted acreage may show some significant loss of total planted acreage relative to March intentions.
"The largest decline is expected for corn acreage," he said. "While crop prices are high and have strengthened since mid-May, the response seems muted given the magnitude of production risk in the United States and other parts of the world. This is particularly true for corn."
Good said it's surprising that prices for the 2011 corn crop have not strengthened even more in an attempt to make corn planting as attractive as possible compared to planting other crops or leaving acreage idle.
For a look at how corn markets seemed to be focusing on production prospects last week, see http://southeastfarmpress.com/grains/corn-market-focuses-production-prospects.