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USDA revised crop data report seen as bullish

Agriculture.com Staff 10/28/2008 @ 6:47am

CHICAGO, Illinois-(Agriculture Online)--The U.S. farmers will produce fewer corn and soybeans in 2008 than first thought, the USDA estimated in its revised October Crop Production report released Tuesday.

"A bullish revision," one CBOT floor trader says. "The report is bullish, but once digested by the market could be traded in a short period today. Higher overnight equities could trump the report or work in a bullish tandem with it. The ending stocks numbers in this revised report are still bearish, traders say."

The early calls for corn are 24-26 cents higher, soybeans up 52-54 cents, and wheat up 18-20. Some floor traders say the report will start the grains limit up this morning.

On Tuesday, USDA revised U.S. 2008 crop production to 12.033 billion bushels, lower than its 12.2 billion estimate in the October report. Harvested acres were lowered from 79.2 million to 78.2 million. USDA estimated U.S. 2008/09 ending stocks at 1.088 billion bushels vs. 1.154 billion bushels in its previous report.

CBOT traders say the ending stocks figure is still large and could weigh down the otherwise seen as bullish figures.

For soybeans, the USDA lowered U.S. production from 77.0 million acres to 75.9 million. USDA estimated harvested soybean acres at 74.4 million vs. 75.5 million. The average soybean yield was left unchanged at 39.5 bushels per acre. U.S. soybean exports were estimated at 1.020 billion bushels, compared to its October estimate of 1.050 billion. U.S. soybean ending stocks were pegged at 205 million bushels compared to 220 million in the October estimate.

U.S. soybean oil and soymeal ending stocks are left unchanged in the revised report.

USDA cited computer problems as the reason for the revised report, according to a USDA press release. This morning's crop report includes changes to acreage and production estimates for corn, soybeans, sorghum, canola, sunflowers and dry edible beans, USDA says. The revisions will have no impact on crop support payments to farmers.

USDA revised the numbers after discovering discrepancies in a Farm Service Agency (FSA) database of producer-reported crop acreage used by the National Agricultural Statistics Service (NASS). NASS published the changes this morning in a corrected version of the Oct. 10 Crop Production. The World Agricultural Outlook Board also issued an abbreviated World Agricultural Supply and Demand Estimates (WASDE) report reflecting the acreage updates.

The revised WASDE report lowers projected supplies, use and ending stocks for both corn and soybeans. Price forecasts are raised slightly for both commodities. Sorghum supply and use projections are revised to reflect the higher forecasted production.

In calculating crop acreage, NASS draws upon several data sources, including farmer surveys, satellite imagery and information reported by producers to FSA. In the original Oct. 10 report, NASS's production estimates were within the range of projections from private industry and other sources. Those independent projections had corn production ranging from 11.8 to 12.3 billion bushels and soybean production ranging 2.85 to 3 billion bushels. NASS projected 12.2 billion bushels of corn and 2.98 billion bushels of soybeans.

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