Soybean Crop Unchanged, Corn Up
Last friday’s USDA reports did not contain any huge surprises for the corn or soybean markets. However, the Oct. 1 soybean crop estimate looks friendly for soybean prices, while the corn production number looks slightly negative.
USDA pegged soybean production at 2.654 billion bushels, 2 million below its Sept. 1 estimate and 24 million below the average of trade estimates.
There was a lot of talk of a 2.7-billion-bushel crop ahead of the report, so the soybean market should bounce on the unchanged crop. CBOT traders have called futures to open 5-10¢ higher.
USDA pegged corn production at 8.970 billion bushels, 121 million above its Sept. 1 estimate and 70 million bushels above the average trade estimate.
Although the trade may be relieved that the corn crop is still below 9 billion bushels, it's not likely to stay there as history strongly indicates that USDA will raise its estimate again in November.
Projected 2002-2003 soybean ending stocks were raised 15 million bushels to 175 million due mostly to higher 2001-2002 ending stocks. U.S. stocks are still very tight and should ensure prices stay volatile throughout the year.
Projected 2002-2003 corn ending stocks were raised by 35 million bushels to 764 million. The increase in crop production was partly offset by lower 2001-2002 ending stocks and a 50-million bushel increase in expected feed use. Corn stocks are still tight at that level, but export demand will have to improve to support USDA's estimate.
Editors note: Richard Brock, Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.