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Old and new crop corn outlook is bullish

Agriculture.com Staff 03/17/2008 @ 12:01pm

Historical Price Trends: best odds for the week of March 17, according to our HPT page are for corn, KCBT wheat and fat cattle. Over the most recent ten years, odds of 70% for lower corn futures than were they closed on Friday. Odds of 80% favor a lower close next Friday for KCBT Wheat than where they closed this Friday. Odds of 90% favor a lower close next Friday for fat cattle futures than where they closed this Friday. Please see the HPT page for the complete list.

For The Week: for the week, May corn futures value increased 2%, May soybean futures value decreased 4% and July CBOT SRWW value increased by 8.8%.

For The Month: Thus far for the month of March, May corn futures value is near even, May soybean futures value decreased 12% and July CBOT SRWW value increased by 16%.

Technicals: Old and New crop corn and soybeans and new crop wheat. For the short term trader, Allendale uses its own unique custom Moving Averages to monitor price momentum, define key support and resistance levels as well as advise where key pivot points are located when bulls may turn bearish and bears to turn bulls. We also include last weeks closing price for the weekly chartist as we draw closer to the end of the week to anticipate the possibility for futures to have a positive weekly close or if weakness is ensuing.

Corn La Nina: according to USDA's meteorologist there have been 8 La Nina years since 1995. Our question is when La Nina occurs what impact has it had on yield from USDA's official first new marketing year supply and demand released in the month of May to the final yield for that same marketing year. On Thursday we explained the facts are 5 of the eight years found the final corn yield larger than the initial May estimate. Based on an average increase in yield of 1.3% Allendale's estimate suggest ending stocks of 806 million bushels vs Allendale's present estimate of 617 million bushels. 2005 had no change between May and the final yield. 2 of the 8 La Nina years had an ave reduction in yield of 4.9% and would suggest 2008/09 end stocks of 249 million bushels. Of the two down years, 1995's reduction was 9.6% and 2000 was down 0.1%. This may likely have something to do with improving corn genetics. In conclusion La Nina may have a perception of poor yields when in fact, research suggest odds are 75% of unchanged to higher yields in La Nina years. Please see the "Of Interest" page for the associated graph.

Soybean La Nina: the facts are three of the eight years found the final soybean yield larger than the initial May estimate. Based on an average increase in yield of 4.3% Allendale's estimate suggest ending stocks of 385 million bushels vs Allendale's present estimate of 357 million bushels. Five of the eight La Nina years had an ave reduction in yield of 3.9% and would suggest 2008/09 end stocks of 260 million bushels.

Wheat LaNina: three of the eight years found the final wheat yield larger than the initial May estimate. Based on an average increase in yield of 6.5% Allendale's estimate suggest ending stocks of 398 million bushels vs Allendale's present estimate of 321 million bushels. Five of the eight La Nina years had an ave reduction in yield of 3.1% and would suggest 2008/09 end stocks of 195 million bushels.

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