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USDA data bullish across the board

Agriculture.com Staff 10/12/2006 @ 7:10am

USDA released bullish numbers for Thursday's trade across the board, with corn called 5-7 cents higher at the opening bell, one analyst said.

For corn, USDA estimated the crop size at 10.9 billion bushels, lower than its previous projection of 11.114 billion in September. The government lowered the average yield from 154.7 bushels per acre to 153. 5 bushels.

"Historically, big crops get bigger as the year goes on," Don Roose, U.S. Commodities said. "This lowering of the corn crop is a real surprise."

Another surprise was the fact that the USDA lowered corn harvested acres by 800,000 totaling 71.0 million acres. This figure was a result of resurveyed acres from earlier this year.

Overall, corn production, forecast at 10.9 billion bushels, is down 2 percent from both last month and 2005. If realized, the yield would be the second largest on record, behind 2004.

For soybeans, USDA raised the average yield from 41.8 bushels per acre to 42.8. Analysts were expecting the yield average to be even higher. Also, USDA raised the soybean crop size from 3.093 billion bushels to 3.189 billion. Analysts were expecting a larger crop estimate.

USDA, dropped world wheat ending stocks by 7.0 million metric tons from 126.38 to 119.30 million metric tons.

"We were looking for a contraction, but stocks are even tighter than what we thought," Roose said.

The question remains if the short-term rally in the markets continues, Roose said. "It will be more important how we close today compared to how the market opens," Roose said. "We are very overbought, there's a need for end-users to want to get covered. The season lows are in, it's just a matter of where we go from here. Plus, we are in a rationing mode with wheat, there is no doubt."

USDA released bullish numbers for Thursday's trade across the board, with corn called 5-7 cents higher at the opening bell, one analyst said.

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