P - Production and Crop Reports (October 24, 2011)
In the U.S, soybean supply will be down to about 3.1b from 3.3b of last year because approximately 3m acres were converted from soybean to corn production. USDA stated that grain stocks will continue to be tight throughout 2012. However, in the South Americas, it seems that seeding conditions are pretty optimistic, so it is estimated to bring in good yield.
Harvesting of wheat is completed in Kazakhstan. The amount is much higher than expected that the government is scheduling exports for two years as they are expecting to export 22-24m tonnes of wheat. Russia also gained 90m tonnes of wheat and is willing to export up to 35% of its supply. High amount of exports expected to come from Black Sea Region which will decrease demand of US wheat, thus US wheat supply is expected to be quite high. Due to these factors, we predict prices to fall.
Farmers in South Dakota are experiencing a good harvest as harvest might be done in October. Farmers “look to have the second-largest corn crop on record and the highest average yield”. The USDA crop report that was released this afternoon stated that 65% of corn harvest in the US is complete and that 54% of it is in good condition, and yield increased 1% from last week. China is also looking at an increase in corn yield. Depending solely on these factors, we predict that prices will fall, but this also highly depends on demand factors.