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Ready, set, it's spring

Agriculture.com Staff 03/30/2006 @ 1:27pm

Friday's USDA reports really kick off the spring season. The prospective plantings numbers will be the benchmark acres the market uses as planting unfolds. The stocks numbers will give the market demand information for the first half of the crop year, which is typically the "heavy half" of usage.

Plantings for the 2006 corn crop are estimated at 80.5 million acres. That's only down 1.2 million acres from last year, much less than the 3 million acres floated in the marketplace in the late fall/early winter. Of course, the debate will not be over on Friday morning, as many realize corn plantings will also be dependant on weather conditions.

Soybean seedings are estimated at 74 million acres, up basically 2 million acres from last year's figures. Not only will soybean acreage increase at the expense of corn, but soy acreage in the northern spring wheat areas may also increase.

If the acreage report puts the focus on supply, the stocks numbers may put a little attention on demand. Particularly the corn stocks numbers will allow analysts to determine how accurate the market has estimated feed use. This is becoming more challenging as ethanol use increases-the corn bushels used in ethanol production are rapidly increasing, but feed use is impacted by the DDG's, the feed by-product.

Since the rains began a few weeks ago, it is hard to be bullish on crop prices based on dry weather in the Corn Belt. Many have realized Mother Nature does remember how to make it rain, especially as the spring season begins. The Drought Monitor, http://drought.unl.edu/dm/monitor.html , has shrunk the drought areas and/or reduced the severity of some areas. Also, the drought effects have become more hydrological (wells, lakes, water supplies) versus agricultural. Remember, especially during the heart of the growing season, that the Drought Monitor is released on Thursday mornings.

Despite the more normal spring weather, commodity funds resurfaced this week as buyers of many different commodities. Corn and soybean prices benefited from these buys, as crude, gold and silver were all strong enough to make the "buy commodities" mantra a popular saying this week.

Friday's USDA reports really kick off the spring season. The prospective plantings numbers will be the benchmark acres the market uses as planting unfolds. The stocks numbers will give the market demand information for the first half of the crop year, which is typically the "heavy half" of usage.

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