● On 31 March 2011, the USDA will release the US Planting
Intentions Report. If the report concludes that soybean acreage
will come in lower than expected, then soybean prices may spike
up and palm oil prices will follow suit.
● In an earlier review, USDA predicted that farmers will sow 10.1
mn more acres this year compared to 2010, in response to high
farm profitability. If true, 2011 would be the second largest YoY
increase in U.S. crop acreage in the last thirty years. Farmers are
expected to plant 92 mn acres of corn in 2011 (up 3.8 mn acres)
and 78 mn acres of soy (up 0.6 mn acres).
● Although the soy-corn price ratio suggests that soybean should
lose acreage to corn, some farmers may still favour planting
soybean due to high fertiliser costs as well as greater weather
risks associated with corn production.
● We believe that palm oil prices peaked in February 2011 and will
be on a downward trend especially in 2H11. We continue to be
UNDERWEIGHT the plantations sector.
source: Credit Suisse
Intentions Report. If the report concludes that soybean acreage
will come in lower than expected, then soybean prices may spike
up and palm oil prices will follow suit.
● In an earlier review, USDA predicted that farmers will sow 10.1
mn more acres this year compared to 2010, in response to high
farm profitability. If true, 2011 would be the second largest YoY
increase in U.S. crop acreage in the last thirty years. Farmers are
expected to plant 92 mn acres of corn in 2011 (up 3.8 mn acres)
and 78 mn acres of soy (up 0.6 mn acres).
● Although the soy-corn price ratio suggests that soybean should
lose acreage to corn, some farmers may still favour planting
soybean due to high fertiliser costs as well as greater weather
risks associated with corn production.
● We believe that palm oil prices peaked in February 2011 and will
be on a downward trend especially in 2H11. We continue to be
UNDERWEIGHT the plantations sector.
source: Credit Suisse