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.
  

