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Less corn in 2009? USDA numbers renew acreage battle

Agriculture.com Staff 01/12/2009 @ 10:01am

The battle for acres between corn and soybeans this spring may not be as cutthroat after Monday's USDA numbers showing higher-than-expected ending stocks numbers for both crops. But, the 2009 acreage picture is far from crystal clear.

All eyes now turn to South America, where weather conditions will have a lot to do with crop size there and, in turn, market prices here. And, soybeans will be leading the charge, analysts say.

"I think it's going to be up to South American weather on soybeans. The balance sheet on beans remains historically tight. We have contacts in Argentina who are concenred that the crop continues to shirink," says Brian Basting of Advance Trading. "The bean price range here will be directly tied to what happens in South America in the next 30-45 days."

Regarding this major factor, March and April will be a key period of time in terms of just how much South American soybean production influences U.S. bean prices, says Joe Victor, Market Analyst with Allendale, Inc. Once they begin bringing in this year's crop, a clearer pricing picture may emerge. And, not just for soybeans.

"When that new supply comes to South America, are we looking at a time period when we start seeing beans break back?" Victor says. "The soybean market is carrying the corn and wheat markets at this time."

With higher corn ending stocks and an unsure soybean crop size in South America, there's breathing room in that sector that may translate to fewer corn acres planted this year, Victor says. Estimates generally range from 80 to 90 million acres, he says, and Allendale, Inc. is estimating it will be between 87 and 89 million, with the firm's full acreage estimate to be released later this month. This guess, he adds is "just to meet the demand growth we've seen without getting stocks too thin," Victor adds.

Joe Victor with Allendale, Inc., talks about the prospects for fewer U.S. corn acres this year, as well as some of the market factors abroad that could weigh on the CBOT grain markets in the next few months (video by Mike McGinnis).

The battle for acres between corn and soybeans this spring may not be as cutthroat after Monday's USDA numbers showing higher-than-expected ending stocks numbers for both crops. But, the 2009 acreage picture is far from crystal clear.

So, what's it all mean for the folks growing the corn, soybeans and wheat? The first lesson from Monday's reports is in yields: Despite some terrible field and crop conditions in some areas during the growing season, a crop was still managed, sometimes eclipsing yield projections.

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