The National Agricultural Statistics Service (NASS) branch of the USDA released two important reports this morning at 8:30am (EST): 2010 US Prospective Plantings and Quarterly Stocks of Grain as of March 1.
Here is JP Morgan’s soft commodity analyst’s Lewis Hagedorn’s take on the newest crop information from USDA.
• Corn acreage fell modestly short of both our own and consensus expectations, providing very slight fundamental support for the 2010/11 balance sheet (especially in light of bearish pre-report positioning) and ultimately arguing for some need to hold risk premium into the growing season. Soybean acreage increased, but by less than we expected; combined with a higher Spring Wheat acreage intentions number, there appears some risk that soybean plantings may yet increase.
• Quarterly stocks of corn and soybeans were both sharply higher than expected. In the case of corn, higher stocks negate, for now, the possibility that perceived supply shortfalls in 2009 will be addressed statistically, through higher feed/residual demand. In the case of soybeans, old/newcrop spreads appeared dependant upon a stocks level below 1.15 mil bu for further bullish momentum; today’s report should result in spread weakness.
- Corn Acreage Forecast: 88.798 mil acres UP 2.32 mil vs JPM 89.0 mil acres Soybean
- Acreage Forecast: 78.098 mil acres UP 0.65 mil vs JPM 79.0 mil acres All Wheat
- Acreage Forecast: 53.8 mil acres DOWN 5.33 mil vs JPM 52.4 mil acres