Continued strong export sales and inspections are bullish to corn futures. Bullish to December corn futures are the prospects of fewer planted acres in 2008 sending ending stocks from 1.4 billion into a range of 600 to 700 million. Slightly bearish to December corn futures is the declining November bean to December corn ratio to a level of 2.24 to 1. Recently the ratio was clearly in favor of planting soybeans over corn at a ratio of 2.5 to 1. The interest is gaining on new corn acres and decreasing on soybeans. Allendale estimates 2007/08 ending stocks of 1.422 billion bushels going into today's supply and demand report. This compares to last months USDA estimate of 1.438 billion bushels. A year ago the 2006/07 ending stocks were at 1.304 billion bushels. Allendale's reduction is based on stronger than usual export sales in the month of February. The range of estimates for today's report was 1.388 to 1.488 billion bushels. For more on this month's supply and demand report check another segment of this eSnapshot.
Bearish to soybean futures are China releasing vegetable oil stocks to temper food inflation in their country. Also bearish to old crop futures is additional crop production estimates from Brazil suggesting record production of 60 to 62 million tonnes, Brazil's declining currency and a cash divergence between Brazil and US soybeans of $20 per tonne. Bullish to soybean futures is tightening old crop stocks as a result of positive crusher margins and active exports of soybeans and soybean oil. Allendale estimates 2007/08 ending stocks at 130 million bushels, which compares to last months USDA estimate of 160 million bushels. Year ago 2006/07 ending stocks were at 574 million bushels. Allendale's reduction is based on stronger than usual February export sales for soybeans as well as soybean meal and soybean oil. The range of estimates for this report was 130 to 160 million bushels.
It is becoming much more apparent old crop Wheat futures are loosing trade interest as end users are focusing on less expensive new crop. Bearish to wheat is a global increase in planted acres and projected increase in 2008/09 ending stocks. Also bullish to wheat futures is dryness in south west Canada and northern China and early US weekly wheat conditions. According to the Texas Statistics Service, its weekly wheat condition report released Monday estimates the good to excellent conditions at 14% versus 10% a week earlier and compares to one year ago levels of 45% good to excellent. Allendale estimates 2007/08 ending stocks of 242 million bushels, which compares to last months estimate of 272 million bushels. A year ago the 2006/07 ending stocks were at 456 million bushels. Allendale's reduction in ending stocks is like the corn and soybeans and is based on stronger than usual export sales for wheat in the month of February as traditional world suppliers of wheat like Russia, Argentina and Kazakhstan continue to place economic restrictions of its exports to help try to control domestic food inflation.
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