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USDA numbers friendly

Jeff Caldwell 10/12/2011 @ 7:33am Multimedia Editor for Agriculture.com and Successful Farming magazine.

The U.S. corn and soybean crops are both slightly smaller than earlier expected, according to Wednesday's monthly USDA Crop Production report.

Corn is forecast at 12.4 billion bushels, down 1% from last month's estimate and slightly off 2010's production. Soybeans are seen at 3.06 billion bushels, also down 1% from last month's guess and 8% lower than a year ago.

Yield-wise, USDA's Wednesday report shows an average nationwide yield of 148.1 bushels/acre. That number's unchanged from last month's estimate, and is down almost 5 bushels/acre from the 2010 crop. "If realized, this will be the lowest average yield since 2005. Area harvested for grain is forecast at 83.9 million acres, down 1% from the September forecast," according to Wednesday's report.

Soybean yields are pegged at 41.5 bushels/acre, down slightly from USDA's October estimate and 2010. This, USDA says, would be the second-lowest national soybean yield since 2003 if realized. 

Those lower production numbers are somewhat offset on the balance sheet by higher projected grain stocks. Wednesday's World Supply/Demand Estimates (WASDE) report shows there's 144 million more bushels of corn on hand in the U.S. Total U.S. corn use, USDA says, is pegged 50 million bushels lower "with reduced exports," according to the WASDE report.

For soybeans, ending stocks are seen just 5 million bushels lower than earlier estimates, at 160 million bushels. "

U.S. soybean exports for 2011/12 are reduced 40 million bushels to 1.375 billion reflecting the slow pace of export sales and strong early season export competition from South America," according to the WASDE report. "The September 1 stock estimate of 215 million bushels indicated higher-than-expected residual use for 2010/11. As a result, the 2011/12 residual use is projected at 32 million bushels, up 9 million from the previous estimate."

USDA post-report press briefing

Early trade reactions

Market-watchers say though Wednesday's Crop Production and Supply/Demand Estimate reports may not be the biggest world-shakers in the world, they sent a couple of clear signals to the marketplace.

"It's not largely bullish, but supportive for soybeans," says Toay Commodity Futures Group, LLC, market analyst and trader Kevin Penner. "Kind of a ho-hum report. Let's call it supportive for the beans. I think a lot of guys were looking for corn yields to be a litle bit bigger. Then, you look at these ending stocks, and they are going to be larger, so that might neutralize corn."

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