"At the annual outlook conference, the USDA used a 2009 corn
planting estimate of 86 million acres to construct the projected
supply and consumption balance sheet for 2009-10," said Darrel
Good. "That projection is equal to 2008 plantings. The USDA used
an estimate of 77 million acres for soybeans, 1.3 million more
than planted in 2008.
"The combined acreage of corn and
soybeans appears low given the 4.2-million-acre reduction in
winter wheat seedings already reported and the expected
2-million-acre reduction in total cotton, rice and spring wheat
acreage. However, the USDA expects total crop land acreage to
decline in 2009 as a result of prospects for lower returns and
fewer opportunities for double-cropped soybeans."
Good's comments came as he reviewed two upcoming USDA reports
to be released on March 31. The March 1 Grain Stocks and
Prospective Plantings reports each could have important
implications for corn and soybean prices.
"The March 1 inventory estimate should be more important for
corn than for soybeans, since the rate of soybean consumption is
well-known, except for seed and residual use," he explained.
"The March 1 stocks estimate for soybeans then should be
well-anticipated. Any large deviation from the expected level
would point to an error in the estimated size of the 2008 crop.
"For corn, the March 1 stocks estimate will reveal the rate
of domestic consumption during the second quarter of the 2008-09
marketing year. Any large deviation from the expected level
would mean that consumption occurred at a faster or slower rate
than projected and/or the size of the 2008 crop was incorrectly
The expected level of consumption during the quarter,
however, is likely in a wide range, he added.
For soybeans, exports during the second quarter of the
2008-09 marketing year can be estimated from weekly USDA
reports, although the official Census Bureau estimates are
currently available only through December 2008. The January 2009
estimates should be released this week.
Through December, cumulative Census Bureau export estimates
exceeded USDA estimates by 37 million bushels.
"Assuming that margin continued through February,
second-quarter export would have totaled about 480 million
bushels," he said.
Census Bureau soybean crush estimates are available through
January 2009, so the February crush must be estimated to
calculate the likely level of March 1 stocks. Crush during the
first quarter of the year was 10 percent less than during the
same quarter last year.
[to top of second column]
"The December 2008 crush was 13.8 percent smaller, and the January
2009 crush was 9.5 percent smaller than in the same month a year
ago," said Good. "If the February crush was about 9 percent smaller
than that of a year ago, the total for the second quarter would have
been about 418 million bushels.
"Over the previous five years, seed and residual use of soybeans
during the second quarter of the year has ranged from 25.9 to 88.3
million bushels. The average was about 63 million bushels. Using the
five-year average for seed and residual use, second-quarter use of
soybeans would have been near 960 million bushels, resulting in
March 1 stocks near 1.3 billion bushels."
USDA estimates place corn exports during the first half of the
year at 790 million bushels. Through December 2008, cumulative
Census Bureau export estimates were 45 million to 50 million larger
than the USDA estimates.
"If that margin persisted through February, second-quarter
exports were near 385 million bushels," he said. "Domestic use
during the quarter is difficult to anticipate, and expectations will
be in a wide range. Assuming that domestic use is on pace to reach
the USDA projection for the year and that use is following a typical
seasonal pattern, consumption during the second quarter would have
been near 2.6 billion bushels.
"Under these assumptions, March 1 stocks would have been near 7.1
The intended planted acreage of individual crops revealed on
March 31 will be important, he noted.
"The market will assess those intentions and decide if relative
prices need to change to alter those intentions," said Good.
"Overall price levels, however, will be influenced by the magnitude
of acreage intended for all crops.
"Unless total acreage is reduced, acreage intentions may point to
a potential surplus of one or more crops in 2009-10."
[Text from file received from