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Thursday, August 12, 2010

August 1 Crop Estimates Will Be Released Thursday Morning



 

We have arrived. It is August 12, when the USDA’s crop statisticians announce the results of their August 1 crop survey. The Crop Report is the most anticipated report of the USDA crop year, since it is the first report to evaluate field samples, and not rely solely upon mathematical calculations.

The report will be released at 7:30 Central time and the farm gate will have the details shortly after the numbers are released.

To put the USDA numbers in perspective, the market has been making its own predictions of what the numbers might be, and Thursday’s initial market action will be based on how the USDA estimates compare to what the trade is expecting. Analysts see the USDA making upward revisions to the 2010 corn, soybean and wheat crop estimates.

The average estimate for corn is 13.282 billion bushels, which would be up more than 35 million from last month‚Äôs estimate, with an average yield of 164.1 bushels per acre, compared to 163.5 a month ago. The range of estimates runs from 13.120 billion to 13.524 billion bushels and 2009‚Ä?s crop totaled 13.110 billion bushels.

Soybeans are projected at 3.366 billion bushels, 21 million higher than July‚Äôs estimate, with an average yield of 43.2 bushels per acre, compared to 42.9 last month. Expectations range from 3.290 billion to 3.432 billion bushels compared to 2009‚Ä?s crop which totaled 3.359 billion bushels.

All wheat production is seen at 2.233 billion bushels, with winter at 1.51 billion, spring at 616 million and durum at 105 million bushels. In July, USDA estimated all wheat at 2.216 billion bushels.

In addition to the US crop production estimates, USDA will also be updating US and global ending stocks projections, with analysts expecting increased demand and fewer carryouts at the end of the marketing year.

The current week’s crop progress report pointed to a small decline in yield potential of .4 bu. per acre. However the 167.1 bushels projected by USDA would be a record amount. The entire crop has pollinated and over half is in the dough stage, slightly better than normal. A survey of 550 farmers by Farm futures indicates a slightly higher national average yield at 167.4 bushels, and a 13.47 billion bushel national crop.

Those same farmers estimated their soybean yield at 43.8 bushels per acre with a national production yield of 3.41 billion bushels. However that yield will be determined by weather for the balance of August and how much rain falls on soybean fields. The national yield estimate for earlier in the week was 44 bushels per acre. 93% of the crop was blooming and 71% setting pods.

Just ahead of the August 1 report release Thursday, the commodity market traded on both sides of even for corn. The CME’s daily newsletter reported, “The corn futures market ended higher after trading on both sides of positive and negative territory Wednesday, as traders regrouped ahead of Thursday's official U.S. crop forecasts. The choppy price action was not surprising based on traders unwillingness to take on added risk exposure heading into a crop report that will provide the next fundamental direction of the market, said John Kleist, broker/analyst with Allendale Inc.

However, Wednesday trade in the soybean market was still focused on profit taking, “Expectations for the U.S. to revise upward its official forecast for this year's soybean output coupled with the bearish influence of a soaring U.S. dollar pressured soybean futures Wednesday. "The market was posturing ahead of Thursday's crop reports, as traders reduced the risk exposure of previously bought positions amid outlooks for higher soybean output forecasts," said Tim Hannagan, analyst with P.F.G. Best.”

Summary:
As the market awaits the USDA numbers, there are expectations for yields to be increased. However, there are about as many indications that the demand will be increasing also, making a strong case for a reduction in carryover. The numbers from USDA will be provided here shortly after they are released.

Posted by Stu Ellis on 08/12 at 01:48 AM | Permalink

Comments

I am expanding my crops this year by leasing people’s yard space for gardening and paying them via crop shares. The city has large concrete planters near the train station which are barren and filled with trash. This past season somone grew mini eggplants in two of these. I hope to help their efforts by growing in one or two more of these planters next season. Thank you so much for the fantastic website. Kirby: Set up a written lease, specify either crop share or cash rent, and you may have quite a few takers. You will probably get quite a few volunteers to harvest your crop for you, so protect your investment. ~Stu

Posted by: kirby makarandang at August 12, 2010 2:02AM

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