USDA seen raising corn numbers
Market watchers expect the U.S. Department of Agriculture to raise its forecast for the size of this year's U.S. corn harvest Monday, after mild, wet conditions benefited crops in much of the country this summer.
The USDA, in its monthly supply-and-demand report due to be released at noon EDT Monday, will update forecasts covering corn, wheat and soybeans. Analysts will closely watch the agency's forecasts for corn and soy crop yields and total output. The amount of production this fall will determine how much supplies can recover from the tight levels of the last year, which resulted from severe drought widely damaging last year's corn and soy crops.
Grain and soy futures prices could swing sharply if the USDA's estimates Monday are far off from expected levels.
Analysts are optimistic about corn yields largely because cool temperatures across the Midwest in much of July kept stress on crops low. Much of the corn crop during that period went through its crucial pollination phase, which determines the number of kernels on each ear of corn.
While analysts are concerned about dry soil in parts of the western Corn Belt, cool temperatures have helped buffer crops in those areas against major damage.
"With the exception of maybe Nebraska, Iowa, Minnesota and the Dakotas, record yield potential exists for all other states," said Joel Karlin, a market analyst for Western Milling, a Goshen, Calif., firm that sells feed grains to livestock and poultry companies.
Analysts expect the USDA to forecast corn production of 14.005 billion bushels this year, up 0.4% from its forecast last month of 13.95 billion bushels, according to the average forecast in a Dow Jones Newswires poll of analysts. Production last year was 10.78 billion bushels.
Analysts expect the government to forecast a corn-crop yield of 157.7 bushels an acre, up 0.8% from the USDA's forecast last month of 156.5 bushels an acre.
For soybeans, analysts expect the USDA to lower its output forecast due to dryness in some areas, as well as slow development of the crop, which could make it more vulnerable to frost damage in the fall.
Analysts on average expect the USDA to cut its soybean output forecast by 2.5% to 3.336 billion bushels, down from its previous forecast of 3.42 billion. The USDA is expected to cut its soybean yield forecast by 2% to 43.6 bushels an acre, from its last forecast of 44.5.
With harvesting in most regions still several weeks or more away, analysts say it's too soon to be overly optimistic about soybean and corn production.
One source of uncertainty is how relatively dry summer weather in Iowa, the top corn- and soybean-producing state, could impact the final development phases of those crops.
One favorable factor for the state's crop conditions is that Iowa had heavy spring rainfall. While those rains delayed planting of crops, they also left crops with healthy levels of soil moisture to draw on during drier periods.
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(END) Dow Jones Newswires
August 08, 2013 12:16 ET (16:16 GMT)
DJ SURVEY: USDA Seen Boosting Corn Harvest View On Good Weather->copyright