What is in this article?:
- Stocks report sends corn futures tumbling
- Also bearish for wheat
• Analysts now say the supply of corn may not be as critically low as once estimated. This could be due to lower feeding or perhaps an understated crop size in 2012, but the result is the same, a higher carryin for 2013.
• Corn prices tumbled on the news and dragged wheat prices down with them.
Also bearish for wheat
The report was also bearish for wheat, noted Basting. “Another surprise was the jump in acreage for hard red spring wheat plantings to 12.7 million acres, which was above the average trade guess. We’re obviously still looking at some weather we may have to deal with, but it does set up the possibility of dealing with a larger crop. Overall, the plantings are a little negative.”
USDA estimated stocks for all-wheat at 1.234 billion bushels, which was higher than the average trade guess. “That implies that feed residual during December, January and February was lower than what the trade expected.”
On the other hand, “We are hearing that quite of wheat is being committed into feed rations over the last month because of the favorable economics of wheat relative to corn. As we move into summer, we may see some tremendous wheat feeding.”
On the other hand, “wheat is linked to corn,” Basting said. “The anticipation was that we would see substantial substitution of wheat into the feed ration this spring and summer. That still may happen, but the dynamics of the two crops have changed now, especially if the extremely tight old crop corn carryout doesn’t come to fruition. If that happens, it will drag wheat with it to the downside.”
According to USDA, sorghum growers intend to plant 7.62 million acres of sorghum for all purposes in 2013, a 22 percent jump from last year. Kansas and Texas are the leading sorghum states and account for 77 percent of the expected U.S. acreage. As of March 24, Texas growers had planted 33 percent of their crop, which is 3 percentage points ahead of last year.
Want access to the very latest in agriculture news each day? Subscribe to Southeast Farm Press Daily.
You might also like: