Indiana Grain Company, LLC

Posted: 06/30/10

By: tomgrisafi

We at Indiana Grain are gearing up for what could be an interesting trading session in the grains today.

This morning, the USDA announced that US farmers planted in excess of 87.0 million acres of corn and 78.0 million acres of soybeans in 2010.

The corn estimate, however, is seen as bullish to the market while the soybean number is "neutral-to-friendly."

According to some traders, early calls for corn place the grain between 15 and 20 cents higher.

The corn data is the most bullish development you could have ever dreamed for corn, says Jason Ward, Northstar Commodity Investment Co. "I see the market opening 20-30 cents higher this morning."

"Less acres than the lowest trade estimate and nearly 300 million less stocks than expected. I am amazed at this corn, it is a double whammy for bullishness. Not only did you take stocks down dramatically, you cut the acreage too. So, if you make an assumption on yield of let's say 167 bushels/acre, you have 1 million less acres. As a result, that's immediately 167 million bushels off carryout. Plus, with the stocks coming in less than expected by 288 million bushels this is a estimated 455 million bushels off carryout, which last month was 1.573 billion bushels," he adds.

"To put that in perspective, the carryout next year with a yield of 167 bushels/acre is 1.118 billion bushels. Wow!"