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THE AMERICAN SOYBEAN & CORN MARKET.HOW DOES IT EFFECT AUSTRALIAN GROWERS?

CORN & SOYBEANS ‘How does your garden grow”

In a surprise bearish report, the US Department of Agriculture increased production estimates and harvested acres for both the corn and soybean markets.

On the corn supply side of the ledger, USDA increased corn yields 0.5 bu./acre to 147.2 bu./acre on a total of 84 million harvested acres (an increase of 45,000 acres). USDA increased corn use with South American weather pulling down world corn supplies. Exports were projected 50 million bu. higher due to lower projected supply prospects for Argentina. Ending stocks for corn now sit at 846 million bu., providing more leeway rather than the low end of trade estimates calling for a mere 582 million bu.

Terry Roggensack, analyst for the Hightower Report, noted that USDA lowered Argentina production estimates by just 3 million tons due to dryness over the critical grain fill period. However, he warned that the production drop may be too low, with many in the field projecting production cuts ranging from 12 to 16 million tons.

If those large production losses due come in, next month USDA could lower world production by quite a bit and raise U.S. exports again, again amplifying the tight world stocks situation in corn, Roggensack noted.

USDA also slightly increased soybean yields, up 0.2 bu. to 41.5 bu./acre, bringing total production to 3.056 billion bu. USDA lowered soybean crush 10 million bu. and dropped exports 25 million bu. from last month and down 226 million from the 2010-11 marketing year. Soybean ending stocks are projected at 275 million bu., up 45 million bu. from last month.

Global soybean production was projected at 257 million tons, down 2.2 million mostly due to lower production forecasts for South America. The Argentina soybean crop was projected at 50.5 million tons, down 1.5 million due to lower projected area and yields, USDA said.

In the short-term, prices will see downward pressure from the bearish news. However, South American weather will again take the front seat in driving prices forward to gauge the total production losses that could result from the continued dry weather.

January 16th, 2012
Topic: IMPORT EXPORT, PLANTS CROPS WEEDS, PRICES Tags: , , , , ,

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