MarketsFarm — Ahead of the next supply and demand report from the U.S. Department of Agriculture (USDA), due out Monday, Allendale Inc. president Steve Georgy said corn and soybean acres are likely to increase, while yields are to decrease.
Georgy projected USDA will up its call on U.S. planted corn acres by 200,000 to 400,000, with planted soybeans acres likely to expand by 400,000 to 500,000.
USDA recently indicated it won’t wait until its October report to solidify its estimate on acres, stating it has enough data already. In the department’s August report, it slotted planted corn acres at 89.8 million, down a pinch from July’s 89.9 million. Planted soybean acres were pegged at 88 million, slipping from July’s 88.3 million.
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While Georgy believes acres will increase, he said lower yields will generate a reduction in ending stocks. He projected the corn yield to pull back from 175.4 bushels per acre in the August report to 172.4 on Monday. He forecast soybean yields at 50.8 bu./ac., down one from last month.
As well, Georgy cautioned that a keen eye should be kept on the energy markets in the coming weeks, as crude oil was on a technical slide. He warned crude could still fall US$4-$5 per barrel during September.
Also, Georgy commented on a sudden spike in U.S. wheat prices on Wednesday, in which Chicago, Kansas City and Minneapolis wheat surged upward, somewhat unexpectedly. However the sizeable gains earlier that session gave away increases that were smaller.
He cited three reasons, the first being Russian President Vladimir Putin claiming the West has too much control over exports out of Ukraine. The second was a 38 per cent reduction in total wheat stocks in Canada at 3.67 million tonnes and the third pertained to the speculative funds.
“The funds – big managed money – are short about 13,000 contracts coming into [Wednesday],” Georgy pointed out, noting they didn’t want to get caught short.
— Glen Hallick reports for MarketsFarm from Winnipeg.
