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Traders see bullish markets

03/30/2012 @ 8:35am

DES MOINES, Iowa (Agriculture.com)--In 2012, the U.S. farmers will plant the largest corn crop since World War II, according to the USDA.

As a result, CME Group floor traders are calling the opening commodity prices higher Friday.

The Early Calls for corn are 15-20 cents higher for old-crop contracts and 5-10 cents higher for new-crop. Soybeans are called 30-40 cents higher, and wheat is expected to open 15-20 cents higher.

In its March Prospective Planting Report Friday, the USDA estimates U.S. corn acreage at 95.9 million acres, compared to the average trade estimate of 94.7 million, and 91.921 million in 2011.

For soybeans, the governmental agency estimates U.S. 2012 acreage at 73.9 million, vs. the average trade estimate of 75.5 million and last year's 74.976 million acres.

USDA sees the 2012 U.S. All Wheat seedings at 55.9 million vs. the average trade estimate of 57.6 million and the 2011 acreage total of 54.409 million.

Grain Stocks

On Friday, the USDA pegged the 2012 U.S. corn stocks, as of March 1, at 6.01 billion bushels compared to the average trade estimate of 6.151 billion bushels.

For soybeans, the 2012 U.S. stocks are estimated at 1.37 billion bushels, vs. the average trade estimate of 1.381 billion bushels.

In its report, the USDA estimated the 2012 U.S. wheat stocks at 1.20 billion bushels vs. the average trade estimate of 1.235 billion bushels.

Jack Scoville, PRICE Futures Group vice president says there is no reason to argue with the sharply higher Early Calls.  

"The trade was scared to death of a bearish report and did not get it.  We will be higher across the board with spreads going nuts, bull spreads in corn and bear spreads in soybeans.  Going to be a wild one."

Sal Gilbertie, Teucrium Trading LLC., says that today’s planting indications report confirms the likelihood of a robust new corn crop with corn acres of nearly 96 million acres. "This should bring welcome relief to the historic balance sheet tightness in old crop corn, but the old crop vs new crop corn spreads will likely stay wide until early season planting manifests itself as early season harvest later in the summer," Gilbertie says.

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