Darrel Good Appears Quotations

Based on current conditions, however, it appears that the soybean prices need to be at a level to discourage a large increase in U.S. acreage in 2006.

A stocks-to-use ration of 8.8 percent, then, means 2006-07 year-ending stocks of 1.047 billion bushels, implying a crop of 9.966 billion bushels. That is, the market appears to be trading a 2006 corn crop that is 1.146 billion bushels, or 10.3 percent, smaller than the 2005 crop. That calculation is obviously sensitive to the forecast of use. A smaller forecast of use implies a smaller crop and vice versa.

At this juncture, it appears that U.S. corn consumption and demand prospects are stronger than prospects for U.S. soybeans.

The June Grain Stocks report will provide the next opportunity to calculate the rate of domestic corn use. Whether or not these projections are changed in the upcoming report, the market appears to anticipate an eventual increase. Stocks of corn at the end of the current marketing year may be 100 to 125 million bushels less than the current forecast of 2.3 billion bushels.