The USDA generates crop production forecasts based on estimates of planted and harvested acreage and two types of yield indications -- a farmer-reported survey and objective measurements.
More Quotes from Darrel Good:
The June Grain Stocks report will provide the next opportunity to calculate the rate of domestic corn use. Whether or not these projections are changed in the upcoming report, the market appears to anticipate an eventual increase. Stocks of corn at the end of the current marketing year may be 100 to 125 million bushels less than the current forecast of 2.3 billion bushels.Darrel Good
South American soybean production prospects will be one of the more important market factors for the next three months.
Darrel Good
Based on current conditions, however, it appears that the soybean prices need to be at a level to discourage a large increase in U.S. acreage in 2006.
Darrel Good
Based on the relationship between the stocks-to-use ratio and price since 1998-99, a price of 2.51 implies a 2006-07 year-ending stocks-to-use ratio of 8.8 percent. In comparison, the current projection of the stocks-to-use ratio for the 2005-06 marketing year is 22.4 percent.
Darrel Good
However, if bird flu results in a permanent reduction in world poultry production, an increase in red meat production might eventually be required, resulting in increased feed consumption in the long term. Domestic demand prospects also remain strong due to increasing livestock production and expanding ethanol production. These developments should support increased corn consumption well beyond the 2005-06 marketing year.
Darrel Good
Markets will continue to react to other factors, but these reports will provide updated fundamental information.
Darrel Good
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