USDA acreage report June 30, 2011

Yesterday's USDA's acreage report provides a much needed corn acreage leap of +5% over last planting season, and the same increase for wheat. This explains futures' price direction of yesterday, however acreage is a poor indicator of yields. We need to wait for the first production estimates to see if the US corn harvest is set to exceed 2010 volumes. This said the US corn balance remains unsustainable as long as demand for ethanol production grows much faster than supply.