Despite the US government holiday, markets are open on Monday. USDA estimates from last Friday’s crop reports projected larger crops for both soybeans and corn, in terms of total production. The soybean estimates are for production to come in at 2.98 billion bushels, which is higher than their September estimate. The corn outlook is for a 12.2 billion bushel crop, which is also larger than the estimate that was put out in September. Their yield numbers for soybeans is still in the same range, while they raised the corn yield expectations.

While some have been surprised, these numbers which were released on October 10th are not necessarily unexpected. One of the factors that analysts still need to bear in mind is that the crop estimates are not accounting for surveys done with yield verification statistics. Production may still be high, based on acreage estimates, but the yield estimates (in tons per acre) still has not fully factored in the effects of the poor weather, starting with the poor planting scenario which affected the Midwest.  See the above map for NOAA’s 90day precip summary. 

USDA’s global inventory expectations for corn, beans and wheat are all for favorable supply situations, which suggest higher carry over stocks into 2009.

The positive numbers combined with lower energy prices may still serve to place downward pressure on the grains complex. This will be a very important period for traders as they start to confirm their 2008 estimates and set expectations for 2009/10 inventory. WTI yield estimates this week are: corn at 140.9 -142 bu/acre, and soybeans still at 38.5-40 bu/acre (18 major growing states).

This entry was posted on Monday, October 13th, 2008 at 11:21 am and is filed under Agriculture, Biofuels, Energy, Global Commodities, Global Weather, Grains, United States. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.