By ANN HINCH
Assistant Editor

CHICAGO, Ill. — Two Chicago agricultural analysts described Friday’s USDA national acreage report as “shocking,” with respect to corn planted for 2007.

“Quite a shocker this morning,” was Brian Basting’s first comment on the news that planted corn was reported at nearly 92.2 million acres nationwide as of June 29, up significantly from the 90.5 million acres projected in late March and 19 percent over last year’s planting.

Basting, a commodity research analyst for Advance Trading, pointed out this is a record-high planting for modern times; USDA noted it is the highest since 1944, when 95.5 million acres were planted. He said growers had “high incentive” to plant and that if the weather remains favorable to pollination and harvesting, production could possibly reach 13 billion bushels.

Greg Wagner, director of marketing risk management for Horizon Ag Strategies, was also surprised. “It wasn’t that long ago,” he said, “that there was much wringing of hands and gnashing of teeth about what were we going to do about corn stocks.”

According to grain trader Matthew Pierce on The Foreign Exchange Market, China is removing corn from the global export market because of drought in its northern plains, drawing more business to the United States. Basting pointed out South Korea, a major buyer of Chinese corn, is already turning toward the United States.

Despite saying growers and ethanol buyers may “breathe easier” in light of the higher corn acres planted, Wagner said “We’re not through the woods yet” – he pointed out favorable weather needs to continue through pollination.

That same day, USDA released its June 1 grain stocks report. Nationally, corn was down 19 percent from one year earlier, from 4.36 billion bushels to 3.53 billion.

Soybean stocks, however, were up 10 percent from June 1, 2006, to 1.09 billion bushels. These are, according to USDA, the largest June stocks on record.

As for soybean plantings, they are down 15 percent from last year even lower than projected in late March – the projection was for 67.1 million acres nationally, and actual plantings are 64.1 million. Basting called it “a bit surprising, given the fact we’re asking really strong bean prices.”

The key weather season for soybeans, he added, is August, so the next 60 days are “critical” to seeing if a high percentage of planted beans will be harvestable. With such a low planting, he said growers can’t afford to lose much in the field, especially with worldwide protein demand increasing as the middle class in India and China grow.

For livestock producers, both analysts agreed while the corn news is good, those feeding protein will probably want to use some coverage to make up for less and/or more expensive soy meal on the market. They speculated soybean prices would increase sharply in the wake of the USDA acreage report and would remain “volatile” through the next couple of months.

As for corn prices, neither would commit, but speculated they could remain level or modestly increase despite more acres, because of ethanol and the potential for worldwide demand in the wake of the China drought. They cautioned however, that they were less confident about their opinion on corn than on soybeans.

As for wheat, USDA reported it is up six percent over last year, at 60.5 million planted acres. Stocks are down 20 percent from June 1, 2006. Basting pointed to poor weather in the Plains states, especially those north, where it was “a struggle” to plant, and said wheat is also off in other parts of the world.

“It’s my understanding we’re losing acres every day in Oklahoma,” he said, adding Kansas yields were also low, though there are a few pockets of high yields, especially in western Kansas.

“Whether (the poorer-harvested wheat) goes into the belly of a steer or the landfill” is yet to be seen, Wagner said.