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Zeroing in on March 30th: as the futures trade draws closer to the March 30th USDA Planting Intention report, the level of interest in planted acres in 2007 over 2006 is gaining momentum expeditiously. Although the December corn futures trade has the ability to react quickly when new acreage estimates are released, Allendale suggest it is extremely important to translate acres to projected end stocks and season average farm price.
Our most immediate observation is even with significant acreage increases in 2007 over 2006 levels, projected end stocks for 2007-08 are LESS than the present tight end stocks levels for the 2006-07 marketing year. As a result of the projected tightness in corn end stocks, is the very real potential for an increase in the “Season Average Farm Price” in 2007-08 over 2006-07 levels. Allendale advises you stay fundamentally alert for the forthcoming USDA Planting Intention Survey but with equal intensity, be very aware of the technical developments within the December corn futures. The influence of non commercials within the corn industry is unprecedented and its ability to depend on “black box” computer driven technical direction needs to be addressed.
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