The USDA’s World Agricultural Supply and Demand report came in bullish for corn.
Factors driving the market include:
- Export demand for corn is up 75 million bushel.
- Yield expectations have been dropped from 137 bushels per acre to 133.9 bushels per acre.
- Projected ending stocks of corn for the 2001/02 marketing year is down 369 million bushels from last month.
- This year’s corn production forecast has been lowered by 229 million bushels for a crop size of 9,266 million bushels.
- A decrease in the expected size of the sorghum crop, down 71 million bushels from last month, should lead to an additional 65 million bushels of domestic corn use.
- Projected corn exports for the 2001/2002 marketing year are up 25 million bushels.
Friday’s report was based on field conditions as of August 1. Since then, hot, dry weather has lingered over much of the Corn Belt during the first 10 days of the month. That means, yield estimates will probably further decline in USDA’s next crop yield estimate.
On the soybean front, prices have rallied to near previous summer highs gaining strength from the hot, dry weather throughout the Midwest. The latest estimates for U.S. soybean production stood at 2,867 million bushels. That’s a decline of 68 million bushels from the previous month’s forecast.
Continued hot, dry weather through August will push those estimates even lower. USDA projects soybean prices for the 2001/2002 marketing year to range from $4.35 to $5.35, and for soybean meal prices to range from $155 to $180 per ton. The higher prices are in response to both tighter global and U.S. oilseed supplies. But keep in mind, so far the projected decline in U.S. soybean production, will be more than offset by projected increases in foreign production primarily in Brazil and Argentina.
USDA’s World Agricultural Supply and Demand Estimates