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Harvest delays threaten crop quality

Agriculture.com Staff 10/30/2006 @ 9:02am

Corn Fundamentals: Over the past five days, sales of 271 K tonnes of USA corn to unknown destinations will be included into next weeks weekly export sales and shipments. Harvest delays continue in the east and quality could become an issue. Private weather forecasters suggest the first big snow storm of the year is planned for Nov 18th. With projected end stocks expected to constrict form nearly 2 billion in 2005-06 to less than a billion for 2006-07, the last thing this present harvest needs is to lose yield under snow.

Dept of Energy: The DOE released ethanol production for the month of August and closes the book on corn use for the 2005-06 marketing year. August ethanol production of 10.2 million barrels suggest total corn use for 2005-06 at 1.615 billion bushels or 15 mil more than USDA presently is estimating. USDA will need to increase use and decrease end stocks based on this research. August 2006 production was the first mth to breech 10 mil barrels. Also recorded for the mth of August was record end stocks of ethanol of 9.2 million barrels, better than the old record of 9.1 million barrels in the month of April. Stocks are now 90% of monthly production vs year ago levels of 64%.

Weekly Export Sales: Cumulative 2006/07 marketing year sales have reached 738 mil bu, 47% higher than yr ago levels and compare to the three yr ave of 543 mil bu.

2007 Corn Hedge Advice: Allendale was successful in hedging 10% more new crop corn at a level of 3320 early this week. New orders have been written and are contained within our Hedge Advice page on where to hedge the next 10% of the 2007 corn production.

2007 Corn Acres: Based on an Allendale Research study, 5.3 million more corn acres may be planted in 2007 over 2006. This is based on a 30% increase in projected season average farm price. What if the season ave farm price were to increase to $2.80 per bushel? Our research suggest corn acres added over 2006's level by 8.6.7 mil acres.

Acres for Ethanol: USDA is presently using 2.15 bil bu of corn use for ethanol in 2006/07. Allendale suggest the level needed is closer to 2.35 bil bu. Allendale research suggest the USA will need 12 million acres of corn to be planted just to satisfy ethanol needs. By the year 2012, acres dedicated to ethanol could peak at 19 million.

July Corn Futures: An update to advise the low end of Allendale's July corn futures price projection of 3400 has officially been met as of Monday's trade. The high side of the range remains 3600, with an extreme of 4000. Wednesday's trade missed the high side target by 4 cents. The price objective was unveiled well before the August WASDE report. The July 2007 futures corn price projection suggest before the end of the first quarter of 2007 futures could correct to 2800. Six to Ten Day and Two Week Forecast: tonights 6 to 10 and two week forecast call for below ave precip and are viewed as bearish to corn and soybean futures.

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