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USDA data bullish for corn, bearish soybeans

Agriculture.com Staff 03/31/2006 @ 7:01am

By lowering 2006 corn acres and raising soybean acres higher than trade estimates, Friday's USDA Planting Intentions report is bullish for the corn market and bearish soybeans, one analyst told Agriculture Online.

Don Roose, U.S. Commodities, is calling corn 4-6 cents higher for Friday's opening futures market.

"If you do the numbers, this report instantly says the U.S. corn carryover drops 400 million bushels. So, this year if we don't have a yield, the carryover could shrink dramatically," Roose said.

Roose added, "This puts the end users on notice like ethanol plants. Plus, the fund investors have had a keen interest in buying corn. On the soybean side, the market price will fall saying essentially that we don't need that many acres."

USDA, in its Friday report, sharply lowered 2006 corn acres to 78.019 million compared to average trade estimates of 80.57 million, and lower than 81.75 million in 2005.

For soybeans, USDA raised 2006 acres to 76.895 million, higher than average trade estimates of 74.05 million, and higher than 72.142 million last year.

For wheat, USDA estimated 2006 all wheat acres at 57.128 million, compared to 57.229 in 2005.

For cotton, USDA estimated 2006 acres at 14.634 million, nearly the same as the 14.41 million trade estimates.

Meanwhile, the USDA's quarterly grain stocks estimate for corn at 6.98 billion bushels equaled the average trade estimates. For soybeans, USDA's stocks estimate of 1.669 billion bushels was slightly below the average trade estimate of 1.67 billion. For wheat, USDA estimated stocks at 972 million bushels, within range of trade estimates.

By lowering 2006 corn acres and raising soybean acres higher than trade estimates, Friday's USDA Planting Intentions report is bullish for the corn market and bearish soybeans, one analyst told Agriculture Online.

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