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More soybeans in Friday's reports?

11/07/2012 @ 9:45am

Analysts expect U.S. government forecasters to raise their estimate for domestic soybean production Friday and to trim their corn projection.

Analysts on average expect the U.S. Department of Agriculture, in a monthly report, to raise its estimate for domestic soybean production this year by 1.1% and to cut its corn forecast by 0.7%, according to a poll by Dow Jones Newswires.

The USDA plans to issue its updated forecasts for U.S. crops and domestic stockpile levels at 8:30 a.m. EST Friday, in its crop-production and world supply-and-demand reports.

A higher estimate for soybean production could ease concerns about tight supplies and push soybean futures prices lower. Soybean futures reached all-time highs in September after a severe drought in the U.S. widely damaged crops over the summer, but prices have come down since then, as rains late in the soy growing season mitigated yield losses.

A lower estimate for corn, meanwhile, could renew concerns about tight supplies of the grain and push prices higher. Futures have traded in a narrow range for the past few weeks as traders wait for new clues as to whether supply and demand are already roughly balanced at current prices. Corn futures hit all-time highs in August due to the drought.

Analysts polled by Dow Jones on average expect the USDA to forecast domestic soybean production this year at 2.891 billion bushels, up from its forecast of 2.86 billion last month. Forecasts by 21 analysts ranged from 2.72 billion to 2.959 billion bushels.

Analysts on average expect the USDA to forecast a national soybean yield of 38.2 bushels an acre, up 1.1% from its forecast of 37.8 last month. The government said earlier this week that 93% of the nation's soybean crop had been harvested as of Nov. 4.

Some traders are worried the USDA could raise its soybean yield estimate by even more--perhaps more than one bushel per acre--as anecdotal yield reports from some parts of the country have been high, said Jerry Gidel, an analyst with Rice Dairy LLC, a Chicago futures brokerage.

Traders will also watch the USDA's forecast for domestic soybean inventories. Even if the agency raises its production estimate, supplies could remain very tight if it also projects greater demand. Export demand for soybeans has been strong despite historically high prices.

Analysts on average expect the USDA to forecast domestic soybean inventories at the end of the 2012-13 crop year next Aug. 31 at 133 million bushels. That would be 2.3% higher than its forecast last month but down 21.3% from inventories at the end of the last crop year. Predictions by 19 analysts ranged from 115 million to 175 million bushels.

For corn, analysts on average expect the USDA to project domestic production of 10.629 billion bushels, down from its forecast of 10.706 billion last month. Forecasts by 21 analysts ranged from 10.1 billion to 10.881 billion bushels.

Analysts on average expect a forecast for the national corn yield of 122.1 bushels an acre, up slightly from the USDA's forecast last month of 122.0 bushels an acre.

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