Corn and soybean prices continue to be influenced by a wide
range of fundamental factors. Currently, those factors include prospects for
the rate of economic growth and commodity demand in China, prospects for the
size of the current South American crop, and prospects for the 2012 growing
season in the Northern Hemisphere.
The USDA’s March 30 Grain Stocks and Prospective
Plantings reports will also provide important fundamental information for
both markets. Anticipating the level of March 1 stocks has become increasingly
difficult over the past year or more. For corn, the difficulty lies in the
erratic levels of implied quarterly feed and residual use since the spring of
2010. Stocks reports since then have provided a number of surprises. In the
newsletter of March
5 some estimates of corn consumption during the December-February quarter
this year and implications for March 1 stocks were outlined. A case can be made
for stock levels in a wide range, but inventories within a few million bushels
of 6.35 billion bushels would be consistent with the USDA’s projection of feed
and residual use for the year. <Read More>
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