Home / News / Crops news / Update: USDA lets the bulls loose

Update: USDA lets the bulls loose

Jeff Caldwell 10/08/2010 @ 7:39am Multimedia Editor for Agriculture.com and Successful Farming magazine.

USDA released very bullish corn and soybean production numbers in its monthly Crop Production report Friday morning. And, the grains responded in kind: Corn, soybeans and wheat all ended Friday's trade locked at limit-up price levels, and market-watchers expect the surge to continue for quite some time.



Corn production's forecast 4% lower than the September report (at 12.7 billion bushels), while soybeans were adjusted 2% lower from a month ago in Friday's report (at 3.41 billion bushels). Corn yields are pegged at 155.8 bushels per acre, down 6.7 bushels from last month and 8.9 bushels below the 2009 crop. Soybeans are expected to average 44.4 bushels per acre, down slightly from last month's guess and up a bit from a year ago.

USDA also made major adjustments to some states' average corn yields in Friday's report. For Iowa, USDA pegged the state's crop at 169 bushels/acre, down from 179 bushels/acre in the September report. Indiana's average yield went from 170 to 160, while Illinois saw the largest yield drop, going from 174 bushels/acre in the September report to 160 bushels/acre in Friday's report.

Putting these numbers into perspective, Rabobank economists Luke Chandler and Doug Whitehead said Friday afternoon that USDA's estimates amount to about an 745-million-bushel drop in corn production in "only a couple of months.

"Average trade estimates suggested a number closer to 160 bushels/acre today," Chandler and Whitehead wrote Friday afternoon.



The message from Friday's numbers paint a fairly clear picture: It all boils down to a big-time bullish boost to the trade in both pits, says U.S. Commodities market analyst Don Roose.

"What it says is small crops get smaller, particularly on corn," Roose says.

In the short term, Cargill senior grain merchandiser Ray Jenkins says the bullish numbers -- which he says will likely drive prices through the rest of fall, winter and early spring through planting -- will erase the last few days' technical ebbing in the corn trade.

"The bull-spreading of the front month gaining on the back-end month was an early indication the market was paying attention. If we closed limit-up today, we would negate all this technical washout from this week," Jenkins says of the corn market. "This is a complete game-changer. This will be a longer-term situation, not anything that's going to get solved in a week or a month."

CancelPost Comment

LOREN KRUSE Rally on! 10/08/2010 @ 8:59am Hopefully a nice bonus for my remaining last of harvest beans that must be sold at the co-op by Tuesday.

Report Abuse Reply
MORE FROM JEFF CALDWELL more +

Will you plant corn late? Here are 5 tips to… By: 04/23/2014 @ 11:59am There's mounting evidence to support the idea that this spring might be a repeat of last…

Corn Planting Slumps Forward -- USDA By: 04/22/2014 @ 8:13am Corn planting remains behind the normal pace, though a weather window may be opening this week to…

Drought Cuts Southern California Water… By: 04/21/2014 @ 2:53pm The drought is bad in the nation's center. Crops are hurting, and there's a lot of…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Farm Bill 2014 Timeline