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USDA data bearish with good demand numbers

Agriculture.com Staff 09/12/2006 @ 7:00am

As projected, U.S. farmers are expected to produce large corn and soybean crops, according to the USDA's September Supply/Demand report released on Tuesday.

In its report, USDA raised U.S. 2006 corn production from 10.976 to 11.11 billion bushels.

Corn yield was increased from 152.5 bushels per acre to 154.

Don Roose, U.S. Commodities, sees the report starting Tuesday's corn trade down 2-4 cents, but the market should be able to digest the numbers fairly well.

"The yield is bigger, but we did take harvested acres down 300,000 and ending stocks down 12.0 million bushels to a fairly tight 1.22 billion bushels," Roose said.

For soybeans, USDA raised the crop size from 2.928 billion in August to 3.093 billion bushels. This is the same as analysts estimated prior to release of the report.

The soybean yield was raised from 39.6 in August to 41.8 bushels per acre.

"This estimate is still fairly conservative," Roose said. "I think many in the trade believe this could go over 43 before it's done."

Overall, the soybean ending stocks were raised 80.0 million bushels from the last report to 530 million. That was offset by USDA raising demand as exports increased 35.0 million bushels, crush up 15.0 million, and residual up 5.0 million bushels.

"So, these numbers buffer the USDA's larger crop size for soybeans," Roose said.

For wheat, U.S. crop size was estimated at 1.801 billion bushels. But, the story is the world ending wheat stocks, Roose said.

"It's the second tightest world wheat ending stocks on record. That is what the market will react to."

As projected, U.S. farmers are expected to produce large corn and soybean crops, according to the USDA's September Supply/Demand report released on Tuesday.

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