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Crop Numbers Moved The Market This Week

posted on January 16, 2004

Hello, I'm Mark Pearson.

A series of government reports released this week point to improving conditions in the economy, even though fears linger about the shaky job market.

The week's two major reports showed prices at both the wholesale and retail levels were up modestly in December. But analysts say inflation remains in check. For all of 2003, the inflation rate ran at just 1.9 percent. Take out volatile food and energy prices and the so-called "core inflation" rate for the year stands at a mere 1.1 percent.

Low inflation rates are important to the economic recovery, especially with wage and income growth so sluggish. But there are some sectors of the economy enjoying profitable times, including U.S. grain and oilseed producers who this week gained from bullish USDA crop reports.


Crop Numbers Moved The Market This Week

The Chicago Board of Trade this week saw soybean, corn and wheat futures move sharply higher after the release of the USDA production and ending stocks estimates... along with higher than expected usage predictions. The USDA lowered its 2003-2004 U.S. corn production estimate by 164 (M) million bushels ... down to 10.114 (B) billion bushels. It also lowered its soybean estimates from 2.452 (M) million bushels to 2.418 (M) million.

The USDA soybean ending stocks were unchanged at 125 (M) million bushels in November. The corn ending stocks were lowered considerably from 1.3 (B) billion to 981 (M) million bushels. And U.S. 2003/2004 wheat ending stocks were lowered from 583 (M) million bushels to 559 (M) million.

Slug export pic

Export news also moved the markets, as the USDA this week announced a private sale of 1.04 (M) million metric tons of U.S. wheat to China.

From importing to growing it's own, China is becoming a bigger player in the biotech crop field. A non-profit group says in 2003, China boosted its biotech plantings of genetically modified cotton crop 33%.

Worldwide, 167 (M) million acres of GMO soybeans, corn, cotton, canola and other crops were planted . That's a 15% increase from 2002. The U.S. was the major planter of biotech crops -- with 105.7 (M) million acres.

How some of those millions of acres of crops will get to market may be worrisome to some Midwest farmers along the Missouri River. The two major barge companies on the Missouri say they will not operate on the river this year due to an uncertain future of the water level. There has been a 13-year debate over whether to keep the water level up to adequate levels for navigation or whether to allow the river to revert to its more natural, shallower, flows in the summer to protect the endangered pallid sturgeon and other wildlife.


Tags: agriculture crops economy genetic engineering markets news USDA