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Grains and Oilseeds Outlook (Power Point Presentation)

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Microsoft Word - AllenCP.doc Agricultural Outlook Forum Presented: February 17, 2006 GRAINS & OILSEEDS OUTLOOK Ed Allen International Grains Analyst Economic Research Service, USDA Grains and Oilseeds Outlook for 2006 Edward W. Allen ERS-USDA [email protected] 202-694-5288 2006 Agricultural Outlook Forum Arlington, Virginia February 17, 2006 Grains & Oilseeds Outlook for 2006 • U.S. wheat, corn, and soybean markets are expected to head in different directions in 2006/07. • Acreage Outlook: A shift to soybeans. • Wheat Outlook: Nearly stable supply and demand. • Corn Outlook: Strong demand expected to buoy prices. • Soybean Outlook: Low prices needed to move supplies. Area planted to the three major U.S. crops remains stable 0 50 100 150 200 250 1990 1994 1998 2002 2006 Million acres Source: U.S. Department of Agriculture, National Agricultural Statistics Service. Wheat Corn Soybeans 2006 Wheat Acreage Outlook • Winter wheat seeding up slightly on rebound in SRW area. • Drought in Texas and Oklahoma a concern. • Spring wheat area expected to decline slightly unless prices rally. • Total wheat acres harvested to decline on a return to normal abandonment. • Underlying slow trend away from wheat. 40 50 60 70 80 90 100 1973 1977 1981 1985 1989 1993 1997 2001 2005 Million acres Long Term Decline in U.S. Wheat Area Planted area Harvested area 2006 Corn and Soybean Acreage Outlook • Corn and soybeans complement each other in rotation, but also compete for area. • Costs of production up much more for corn than for soybeans. • Loan rates limit downside price risk for both. • Fear of Asian Soybean Rust reduced. • Soybean planted area to expand, corn decline. • A return to a normal harvested-to-planted ratio would trim both corn and soybeans acres. 2006 Acreage Outlook Change2006P2005 -1.8194.9196.6Total harvested +1.4212.0211.1Total pl

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