North Dakota officials announced this week that growing demand for biodiesel, combined with new health benefits is leading to a dramatic rise in that state's canola acreage. Last week, the Food and Drug Agency announced it would allow processors of canola oil, and some foods made with it, to claim the products reduce the risk of coronary heart disease. North Dakota produces about 95 percent of the nation's canola. This year, growers planted 930,000 acres in the "golden crop" and officials are calling for that figure to double in two to three years. Federal officials gazed into their crystal balls this week as the agriculture department released its much-anticipated October Production Estimates.
Over the past few weeks virtually all the coarse grain markets have been trending higher. The movement continued upward following the release this week of the USDA's monthly production estimates.
For corn, USDA reduced its production estimate by 2 percent from last month's report. The reason, analysts say, is the rain in September came too late for corn fields in Illinois, Nebraska and Ohio. Nationwide, corn production is now forecast at 10.9 billion bushels. While the crop estimate is reduced, USDA says it will still be the third largest corn harvest ever.
Soybean production estimates were raised by 96 million bushels from last month's government report. USDA now forecasts a record 3.19 billion bushel crop --- with an average yield of 42.8 bushels per acre. The harvest estimate is up 3 percent from last month's report and up 4 percent from last year. If realized, the 2006 soybean harvest would be the highest production on record.
USDA projects the 2006-07 ending stocks for wheat at 11 million bushels lower than last month's estimate – down to 418 million bushels. Exports were raised by 25 million bushels, which indicates tighter world supplies.