Production and Crop Reports (November 8, 2011)
CORN harvest in the US is the smallest in three years and the government's forecast for production is "27.4 million tons less than four months ago." (1) With 7 billion people in our world, it is more important than ever for agricultural supplies to increase at a rate equal to growth in order to meet everyone's needs. Based on this, we predict corn prices to rise.
For SOYBEANS, we expect a slightly lower estimate for USDA's November crop report, due to the mid-September freeze that damaged crop yields. (2) On the other hand, Brazil has a record soybean crop, up from their early October forecast, and slow export demand which puts downward pressure on prices. (3) Argentina also has record crops. There is also a perceived slow (& reduced) export demand for US soybeans. (4) From this analysis, we predict soybean prices to fall.
For WHEAT, there is strong harvest and exports from Australia, coupled with record stocks left over from last season's harvest. This will "boost exportable supplies this season." (5) US supply is reduced by 30 million bushels this month. Exports are projected down 50 m bushels due to high competition from Black Sea Region, Australia and Europe (prices from AUS and Black Sea is cheaper than US prices). Based on these, we predict wheat prices to fall.
(1) http://www.businessweek.com/news/2011-11-07/damaged-u-s-corn-crop-pressures-global-food-supply-commodities.html (2) http://cornandsoybeandigest.com/blog/usda-seen-lowering-crop-estimates-slightly (3) http://af.reuters.com/article/commoditiesNews/idAFL4E7M73FI20111108 (4) http://www.porknetwork.com/pork-news/Soybean-export-progress-133372788.html?ref=788 (5) http://www.agrimoney.com/news/low-price-to-drive-aussie-wheat-exports-to-record---3810.html