USDA Acres & oil: 2011 crop factors

The biggest message from last month's USDA grain supply and production reports was that there's not much margin for error with this year's corn and soybean crops. The world needs a lot of both crops. But, the same could still be the case next year at this time; that slim margin for error may be just as tight next year, making a big 2012 crop just as important as a big one this year, says Iowa State University Ag Marketing Resource Center director Robert Wisner.

"Early indications are that crop plantings this coming spring and normal yields would provide only a very modest easing of the tight supplies and that additional easing would be likely to occur in 2012-13," Wisner says. Even if crop output's average this year, the economist says some demand factors could expand in future years, adding to the supply squeeze.

"One should keep in mind several important variables that may influence the degree of tightness next season, including 2011 weather and crop yields in the U.S., China, former Soviet Republics, Europe, and South America," Wisner adds. "Also, with record or near-record high corn and soybean meal prices, it likely is only a matter of time before significant rationing of feed demand begins to occur." Read more ...

This blog is written by Martin Little The Global Miller, published and supported by the GFMT Magazine from Perendale Publishers.