For those long on grains, the “sole bright spot” in the US Department of Agriculture’s annual planting report was soybeans, says Sudakshina Unnikrishnan of Barclays Capital. The estimated acreage planted by farmers came in below expectations. Add in downward revisions to Argentinean production and continuing strong Chinese imports and the implications “bode well for soybean prices”.
For other grains, the report was seen as “dramatically bearish”, says Ray Grabanski in AgWeek. Corn plantings were estimated at 87 million acreages, up two million from March estimates and the second-largest since 1946. Meanwhile, weather conditions in the US Mid West have been “nearly ideal” for crops, says Christine Stebbins on Reuters.
Consequently, corn for December delivery slumped to a four-month low, as did wheat for delivery in September. Despite expectations that the Western Australian wheat crop will drop as low as ten million tonnes this year, from 13.6 million in 2008, record production last year means ample global stocks, keeping prices under pressure, says Unnikrishnan.