BISMARCK, AR, July 23, 2009
/24-7PressRelease/ -- Following a note to shareholders from analysts at CLT Solutions, which cited the El Nino weather phenomenon and droughts in South America as key factors behind decreased yields for corn, wheat and soy crops, news that in the U.S., wet weather cut planted acreage and trimmed corn and wheat yields has added weight to CLT Solutions argument taking a strong position on these commodities. The CLT Solutions team are said to have elaborated further that Soybean supplies on Aug. 31 may fall to the smallest in five years on record export demand.
According to the average estimate of 18 analysts in a Bloomberg News survey, the U.S. Department of Agriculture this week likely will cut its estimate of corn reserves on Aug. 31, 2010, to 1.052 billion bushels, down 8.1 percent from a May forecast and the lowest in five years. The analysts said 1.608 billion bushels would be on hand before this years harvest. These revised figures are largely in line with those put forward by CLT Solutions a number of weeks ago, a fact which must surely bring a smile to the faces of CLT Solutions executives and shareholders alike.
A markedly below-average planting pace since early May, coupled with the existing weather-related factors we have outlined previously, suggest bullish supply risks around both acreage and yield, CLT Solutions commodities arm. We are therefore maintaining our stance of continued upside for U.S. corn exports because of smaller South American crops and improved Asian livestock feed demand, said a spokeseperson, who predicts inventories on Aug. 31, 2010, at 879 million bushels, a 13-year low.
U.S. wheat production in the year starting June 1 may be smaller than the government forecast last month as rains damaged winter crops in the southern Midwest and in the Mississippi River Delta region and hampered planting of spring wheat across the northern Great Plains. This is subsequent to the drought situation in Argentina, previously brought to light by CLT Solutions, which had already stifled inventory potential for the coming year.
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