USDA crop predictions assessed

Mar 31 2008

It’s a long ways to harvest and far too soon to know what effect a larger than anticipated wheat crop in the United States will eventually have on prices, says the general manager of the Ontario Wheat Producers’ Marketing Board.

by BETTER FARMIING STAFF
“Really we’re not putting a lot of weight on this (report),” said Larry Shapton, commenting on today’s release the U.S. Department of Agriculture’s (USDA) first prospective planting report for 2008.
Shapton noted that even if North America ends up with more acres in wheat— the report predicts 63,803 million acres will be planted in the U.S., nearly 200,000 more than previous estimates for 2008, and six per cent more than was planted in 2007 — the continent isn’t the only major player in the commodity and markets have yet to feel the impact of other countries’ crops.
“Australia hasn’t started planting yet and it’s a huge factor, same with Russia,” he said, adding the Ukraine and Europe are other key players in world wheat markets.
Shapton suggested that markets responding to Mar. 31 predictions could produce 20 to 40 cent a bushel price fluctuations. That activity would be less significant than the fluctuations the wheat market has experienced over the past few months, he said.
With 1.35 million acres of winter wheat planted this year, Ontario is looking at its third record-breaking wheat crop in five years. (The previous record, set in 2006 was 1.25 million acres, Shapton said).
Leo Guilbeault, chair of the Ontario Soybean Growers also says it’s too early to tell just what the implications of the USDA’s estimates might be on Ontario’s soybean crop.
By mid-Monday, the 18 per cent acreage increase for beans and an eight per cent drop in corn acreage predicted by the report had caused market prices for soybeans to drop and corn prices to rise, he said.
“There’s still lots of time between now and planting; if beans keep going down limit for the next couple of days and corn keeps going up, that might sway some acres yet,” he said. Even with a shift, the impact would be more significant in the United States, where millions of acres could be involved, than in Ontario, where a shift might only involve hundreds of acres, he observed.
“Supply is so tight on both commodities, really. Weather’s probably going to predict more than anything over the next little while here on what (will go in),” he said, noting earlier planting dates may favour more corn acreages with demand for corn in the United States being high.
USDA prospective plantings report: highlights:
Corn – 86.014 million acres, down eight per cent from 93.6 million acres in 2007
Soybeans — 74.793 million acres, up 18 per cent from 63.631 million acres in 2007
Wheat – 63.803 million, up six per cent from 60.433 million in 2007.BF