Agricultural News
AFBF Economist Reacts to Monthly Crop Numbers
Fri, 10 Dec 2010 16:58:17 CSTThe American Farm Bureau Federation says the Agriculture Department's December crop report shows continued tight supplies of corn, cotton and soybeans that will help drive planting decisions next year. AFBF economist John Anderson says the report indicates supplies of the three crops will be tight going into the new year. That points to strong demand, higher prices and an increase in corn, cotton and soybean plantings in 2011.
Anderson said USDA's minimal change to the corn stocks forecast was a surprising point in the December report. Corn demand has been very strong, driven mostly by record high ethanol production. According to Anderson, - ethanol production has continued to trend upward in recent weeks, and we would have expected USDA to show a small drop in the corn carryover level, or at least some adjustments within the various corn-use categories, but they didn't.
Anderson predicts corn prices to remain fairly strong overall, even if the short-run reaction to the report is kind of bearish. And with low stocks of soybeans and cotton, Anderson says - competition for acreage will be intense.
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