November 19, 2014


Divergent USDA and FSA figures on US corn, soy acreage persistent-Morgan Stanley



Morgan Stanley said overstated official estimates for US corn and soybean sowing areas offered potential for support to prices of the grain.


The bank noted the absence of "convergence" between the official estimates made by the US Department of Agriculture for corn and soybean plantings this year at 90.9 million acres and 84.2 million acres respectively and the data provided by the farmers themselves.


Figures for both corn and soybean sowings provided by the USDA and the Farm Service Agency (FSA), an attached agency of the USDA, which runs farm support schemes including loan programmes and disaster assistance, are dissimilar.


The FSA said last week that corn farmers had reported to it 85.84 million acres of sowings, which remained well short of the USDA estimate.


For soybeans, the FSA reported 81.39 million acres, again well short of the USDA's official estimate.


Morgan Stanley said this year's data showed an "unusually persistent discrepancy" between the FSA and USDA figures.


Historically the USDA's planted acreage figures are "as much as 2.1m acres too high for corn and 1.4m acres too high for soybeans", the bank said, adding that the data gap "implies a potential for downward acreage revisions" in the USDA data, "primarily for corn".


This prospect, it said, could be "a catalyst for additional upside to corn [prices]".


Morgan Stanley said corn futures may outperform soybeans "in the coming months", bringing "downside to the soybean:corn [price] ratio", which has remained high on the Chicago futures exchange, helped by soaring US soymeal values.