U.S. CONSERVATION FIGURES SEEN NEUTRAL/BEARISH
U.S. Agriculture Department (USDA)
figures for highly-erodible land enrolled into the Conservation
Reserve Program were regarded by most grain analysts as neutral
to bearish, although some said a full state-by-state breakdown
would be needed to assess the full price impact.
    "Out of 10.5 mln acres only 1.9 mln acres were accepted in
corn -- That's neutral at best and perhaps bearish to what the
trade was looking for," Dale Gustafson of Drexel Burnham
Lambert said.
    The USDA said it had accepted 10,572,402 more acres into
the conservation program out of bids on a total of 11,254,837
acres.
    Gustafson said he would not be changing his estimate of
planted acreage for corn as a result of the latest figures, but
some other analysts said they would adjust their estimates
slightly. The USDA is due to release planting intentions
figures March 31.
    Indications of a heavy sign-up in the conservation program
recently lowered most trade estimates of corn planted acreage
to 63.0 to 67.0 mln acres from 67.0 to 69.0 mln.
    Richard Loewy, analyst with Prudential Bache Securities,
said there was not enough information to completely assess the
conservation figures. "The 1.9 mln acres on corn is certainly
disappointing," he added.
    The USDA later released the state-by-state breakdown of the
enrollment figures.
    Loewy said the initial figures appeared to be negative for
both new crop corn and soybeans, and might possibly mean an
upward adjustment in planting intention figures.
    Asked about the impact on the flow of generic certificates
onto the market this spring, he said: "The trade was definitely
looking higher, so certificates are going to be less than
expected."
    The USDA offered a special corn "bonus" rental payment to
the farmers to be paid in generic certificates. The bonus
amounts to two dlrs per bushel, based on the farm program
payment yield for corn, for each acre of corn accepted into the
reserve.
    Katharina Zimmer, analyst for Merrill Lynch Futures, said
the conservation sign-up was slightly higher than she had
expected, although she noted that some trade expectations were
considerably higher than the actual figures.
    "I think it is friendly for the market, at least in the
long run," she said.
    Susan Hackmann of AgriAnalysis said there was some
confusion over whether trade ideas of an enrollment figure
between 15 and 18 mln acres referred to the total sign-up or
the latest addition.
    "It seems the trade was looking for more acres to be bid
into the program," she said.
    Hackmann said she would not make much change to her ideas
about corn planting figures as a result of the conservation
sign-up. She added that while some trade guesses were as low as
61 mln acres, she was looking for corn plantings to be in the
high 60's.
    Zimmer of Merrill Lynch said she would be making a slight
reduction of about one mln acres in her planting estimate to
around 64 mln acres.
    New crop corn prices at the Chicago Board of Trade firmed
earlier this week on ideas of a large sign-up in the program,
despite the fact that acres enrolled are generally poor
yielding and not likely to make a substantial difference to
final production figures.
 Reuter
