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USDA releases bearish data

CHICAGO, Illinois ( U.S. farmers planted a lot more corn acres in 2011 than the trade expected, according to the USDA Thursday. In its June Acreage and Quarterly Grain Stocks Reports, the government released very bearish data.

The Early Calls for commodities for Thursday's trade are as follows: Corn 30 cents (daily limit) lower, soybeans 20-25 cents lower, and wheat to follow, according to the CME Group floor traders.

For corn, the USDA's estimate of 92.3 million acres is above the average trade estimate of 90.776 million and below the March estimate of 92.178 million.

USDA estimates the 2011 U.S. soybean acreage at 75.2 million, vs. the average trade estimate of 76.476 million and its March estimate of 76.609 million.

In its report, the USDA sees the U.S. 2011 All Wheat acreage at 56.4 million vs. the average trade estimate of 56.607 million and its March estimate of 58.021 million.

Grain Stocks

USDA estimates the U.S. 2011 corn stocks, as of June 1, at 3.671   billion bushels, compared to the average analysts estimate of 3.324 billion bushels.

For soybeans, the U.S. 2011 stocks estimate is at 619 million bushels vs. the average trade estimate of 597 million bushels.

The USDA put the U.S. 2011 wheat stocks figure, as of June 1, at 861 million bushels, compared with the average analysts estimate of 825 million. 

Report Reaction

Tim Hannagan, senior grain analyst, says the report is bearish corn. "The planting number is obviously over the high end of expectations and a lower bean number under the low end of estimates. This will create spreading between crop contracts."

All the stocks on-hand numbers were over pre-report estimates, Hannagan says. "The markets will react sharply in both directions," Hannagan says.

Louise Gartner, Spectrum Commodities analyst, agrees the report looks pretty bearish for corn with both stocks and acres much higher than expected. "Farmers pushed forward with plantings even though it was past the normal cut-off date. Old and new crop should be pressured, but a very high export sales number could offer some support to old crop (maybe)."

Soybean plantings below estimates are supportive but stocks were high, so that will offset, she says.
"Wheat plantings a bit light, obviously coming from lower spring wheat and durum plantings. Spring wheat farmers also pushed through with planting even though it was late.  Wheat stocks higher than expected will likely pressure old crop," Gartner says.
Looks like markets will be lower and will target last week’s lows, say the majority of analysts.

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