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USDA data seen bullish for corn, soybean markets

Agriculture.com Staff 07/12/2006 @ 7:00am

USDA, in its July Supply/Demand, report released bullish numbers for corn and soybeans, and neutral data for wheat, one analyst said.

For 2006-2007 corn carryout, USDA estimated supply at 1.07 billion bushels, about 200 million bushels below trade esimates, and below USDA's June estimate of 1.091.

Jason Ward, North Star Commodity Investment Co., said the corn market could see more of a run-up on today's trade.

"What this means is the USDA is saying we are going to have less corn with an acreage increase from last month's report. This is the corn supply we will have after all the new ethanol plants come online," Ward said. "As we go through this month's pollination period, there is that much less room for adversity."

Ward added, "The question becomes how did we lose this much crop? Is the USDA already factoring a lower yield for this crop?"

Don Roose, U.S. Commodities, said the report shows the corn used for food vs. fuel fight is on.

"In this report, the government increased last year's feed usage 100 million bushels, increased 2007 feed usage 100 million bushels, leaving ethanol 100 million bushels short. Plus, the average corn yield has been left at 149 bushels per acre. The big question is whether this number grows with the weather uncertainties," Roose said.

For soybeans, USDA estimated 20006-2007 carryout at 560 million acres. Last month, USDA 2006-2007 carryout estimate was 655 million bushels.

"Even though today's number was within 10 milllion bushels of what the trade thought, it still is friendly to the market."

For wheat, USDA raised 20006-2007 carryout 22 million bushels at 438 million, but inline with trade expectations.

Louise Gartner, Spectrum Commodities, Beavercreek, Ohio, said wheat trading should start higher, according to the Dow Jones newswire. Because the USDA lowered spring wheat yields, the data is neutral to friendly. Also, the world crop situation is supporting the market, Gartner told Dow Jones newswire.

USDA raised its 2006-2007 world carryover estimate from 128.2 million bushels in June to 133.2 in today's report.

USDA, in its July Supply/Demand, report released bullish numbers for corn and soybeans, and neutral data for wheat, one analyst said.

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