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Report watch

Agriculture.com Staff 03/08/2007 @ 2:13pm

The USDA supply/demand report Friday morning will be a momentary distraction for the market. Few changes are expected, especially on the domestic supply/demand tables.

There should be some changes in foreign crop sizes. For corn, the South African crop will decline and the Brazilian crop will increase and these adjustments should offset. For soybeans, few changes are likely, although the Argentine crop may be a little bit larger.

The export sales report this morning showed larger than expected corn and soybean sales. The break in price, which began the last few days of February, looks like it stimulated buyers to action. It certainly did not take a huge drop in prices to encourage end users to extend coverage.

The focus of the market remains the March 30th Prospective Plantings and Grains Stocks. The market may have to deal with additional private estimates before the 30th. These estimates seem to be of two distinct varieties; a think tank or consulting firm estimate and a farmer estimate. So there are two schools of thought: corn acres up 8-9 million or corn acres up 12 million.

While the acreage numbers will be important for the future, the grains stocks numbers are crucial for the present. The amount of feed rationing is a key item as the market tries to grapple with demand prospects when corn prices are above $4.00. Meat carcass weights have come down, as a result of high feed prices and harsh weather. The market also realizes that new crop wheat will make it into feed rations this summer. Still, the grain stocks numbers are the only way to accurately gauge feed use.

The USDA supply/demand report Friday morning will be a momentary distraction for the market. Few changes are expected, especially on the domestic supply/demand tables.

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