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Looking ahead

Agriculture.com Staff 02/19/2010 @ 6:56am

The USDA's Annual Ag Outlook Forum is currently going on and some more up-to-date projections from the USDA economists have been revealed. The Chief Economist Joe Glauber spoke this morning and updated some key numbers. For example, the USDA now forecasts corn acres at 89.0 million acres and soybean acres at 77.0 million acres. These numbers are closer to what the trade is discussing.

Of course, the reason these acreage numbers do not attract more attention is that they are not based on any sort of survey. That farmer survey will occur soon and be released on March 31st (the Prospective Plantings report).

These forecasts are done by the same group of people who prepare the monthly supply/demand reports.

The main Outlook Forum web site is http://www.usda.gov/oce/forum/ . Webcasts, presentations and speeches are posted.

In the past few days, grain and soy prices have tracked the moves in the US dollar. This was especially true for the sharp rallies and retreats on Tuesday and Wednesday. All this week, crude oil has simply rallied. So there has been a disconnect in the price relationships between corn, ethanol, crude, soybean oil, etc.

Growth in ethanol is still occurring, but the pace is not as fast. The industry nears the blend wall and cannot ramp up further. This stability could be the reason for corn prices not tracking every tick of crude oil prices. It may also come back to the change in attitude since the January crop reports-there is less fear about supplies, so there is less correlation with outside markets.

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

The USDA's Annual Ag Outlook Forum is currently going on and some more up-to-date projections from the USDA economists have been revealed. The Chief Economist Joe Glauber spoke this morning and updated some key numbers. For example, the USDA now forecasts corn acres at 89.0 million acres and soybean acres at 77.0 million acres. These numbers are closer to what the trade is discussing.

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