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USDA Crop Report

posted on July 16, 2004


USDA pumped out much-anticipated reports this week on crop production, and supply and demand. The summaries contained few surprises, but DID confirm the sense of most traders that this year's corn crop will be huge. The latest official forecast calls for a record harvest of 10.6-billion bushels. That would be 521-million bushels above last year's record.

Beyond the numbers, the reports also marked a point in the summer growing season where most traders have shifted full emphasis to new crop fundamentals.

USDA Crop Report The number that stood out the most was the 2004-05 U.S. corn ending stocks forecast of 991 million bushels, up 251 million bushels from last month. While yields appear strong, the increase put pressure on corn prices with futures going below $2.50. Analysts predict these numbers may not change if corn production remains at an all-time high.

On the soybean front, production is projected at 2.94 billion bushels, down 25 million from last month's forecast. The U.S. season-average bean price is estimated at $5.70 to $6.70 per bushel. Soybean meal and oil prices also are unchanged. Meanwhile, ending stocks for 2004-05 are projected to fall 10 million bushels from last month to 105 million bushels, the lowest since the late 70s. Indeed, the July contract dropped 91 1/2 cents in its final three days on the board. Experts also worry the outlook for new crop beans may be bleak with the drop in July prices.

In the wheat pit, 2004-05 ending stocks were unchanged from last month. Total domestic wheat production is estimated at 2 billion bushels, down slightly from last month and down 277 million bushels from last year. Wheat traders saw the report as neutral.


Tags: agriculture corn crops government markets news trade USDA