11:00 NY – The U.S. government report forecasts record corn crop planting since World War II.

Across the U.S. farmers are planting corn in record numbers, according to Prospective Planting report released by the Department of Agriculture. The report forecasts that 90.5 million acres will be planted in the current year, up from 78.3 million in 2006. The last record corn season was in the year 1944 when 95.5 million acres were planted. The report also stated that soybean crops are expected to fall 11% to 67.14 million acres.

Corn prices in the year 2006 jumped 74% and are expected to remain at elevated level. Ahead of the release of the report the corn prices were trading higher in Chicago trading. Soybean prices jumped.

The Prospective Planting report is based on survey of 86,000 farmers conducted during the first two weeks of March. Farmers in the U.S. harvested 10.535 billion bushel of corn last year, third largest crop ever and soybean production rose 4.1% to 3.2 billion bushels. If farmers do plant the estimated acres and normal weather pattern remains for the year than crop is likely to exceed 12.3 billion bushel, up 4.8% from a year ago according the report. About 20% of the corn production is likely to be used for ethanol production.

Ethanol has been a mixed blessing for farmers. While demand from ethanol acts as a big boosts for the corn demand but it also raises prices of land and production costs for farmers. Approximately 5 billion gallons of ethanol is expected to be produced by 120 plants in the U.S. generating 3% of gasoline demand in the country. Crude oil consumption is likely to rise 1.8% in the U.S. despite record oil prices.

10:15AM NY – After 30 minutes of trading New York maintains a positive bias. Oil climbs above $66 per barrel and USDA report showed that farmers plan to plant largest amount of corn production since the second World War.

Market averages made a steady climb in the first thirty minutes of trading in New York. Personal spending and income report for the month of February showed a rise of 0.6% in both but savings rate declined at 1.2% in the month.

Volatile oil price in the first hour of trading rose 55 cents to $66.57 per barrel as tensions between Iran and Britain continued in the Middle East. British government said that it will escalate the issue if sailors are not released and Iran wants a guarantee that Britain will not cross its borders again.

In trading tech stocks traded higher, slightly. Apple, Microsoft, IBM, Cisco and EMC had less than 0.4% gains. Dell dropped 2% on the news that the company has discovered evidence of accounting misconduct and errors and will delay annual report and 10K report filing. Red Hat said that it expects to earn between 67 cents and 72 cents in the current fiscal year, stock fell 1% after advancing at the opening.

Oil complex stocks rallied in the wake of higher price of oil. Valero, Exxon and Tesoro advanced better than 1%. Conoco Phillips and Marathon Oil declined a fraction.

Brokerage companies Goldman Sachs, Morgan Stanley, Merrill Lynch and Lehman Bros gained close to 1% after thirty minutes of trading.

Nymex (NMX: chart) rose 79 cents to $136.46 on an upgrade from UBS on increased volatility in the oil trading.

9:45AM NY – Personal spending and income rose in February, market averages struggle at the opening.

The Commerce Department reported that personal spending in February rose 0.6% and so did personal income in the month. Economists were looking for a rise of less than 0.4%. After adjusting for price inflation in gasoline and other food products the personal spending rose only 0.2% in February after gaining 0.3% in January. In January, personal income rose at 1% and personal spending rose at 0.5%.

Stronger spending and income put asides fears of economic slow down in the morning trading, however, economists are still revising their estimates of economic growth for the year to less than 2.5%. Worries related to slow down in housing and lack of rebound in capital spending from businesses was cited as prime reasons for lowering estimates.

The report also noted that the measure of inflation index, core inflation, excluding food and energy prices, rose 0.3% in February and for the last twelve months rose at 2.4%, higher than the Fed’s preferred target range of less than 2%.

The report also said the personal savings rate remained unchanged and declined at a rate of 1.2% in February.

9:30AM FTSE 100 trades lower Friday on weak Vodafone and Resolution.
The UK market was lower on Friday. By mid-morning, the FTSE extended its early losses to move 26.4 points, or 0.4% to 6,298.1.

Advancers

M&A activity provided some respite for the market. Home improvements retailer Kingfisher led the FTSE gainers, 2.5% higher on reports that Goldman Sachs private equity division was mulling a bid for the owner of B&Q. Scottish & Newcastle traded 0.6% higher following the 12% surge in the brewing giant share price on Thursday, due to by bid speculation.