USDA Crop Data Supports Soy Complex, Neutral for Corn, and Friendly for Wheat Futures

Strategic Insights -

The latest U.S. Department of Agriculture (USDA) crop data released on Wednesday has been met with a mix of reactions from traders on the Chicago Board of Trade (CBOT) agricultural floor. Soybean futures are expected to open higher, while corn and wheat futures remain relatively stable. The data shows a 900,000 acre reduction in planted and harvested acres for soybeans, adding to the bullish tone, but a world soybean ending stocks figure above September's forecast is expected to temper the report.

Key Takeaways:

  • The USDA's soybean production estimate of 2.967 billion bushels is below analysts' pre-report expectations of 3.006 billion bushels and below last year's record crop of 3.124 billion bushels.
  • The domestic crush figure for soybeans was raised by 10 million bushels to 1.695 billion bushels, while the estimated ending stocks figure for 2005-06 was raised by 55 million bushels to 260 million bushels, below the average trade estimate of 304 million bushels.
  • The USDA forecast U.S. 2005 corn production at 10.857 billion bushels, above the government's September estimate of 10.639 billion but below last year's record corn crop of 11.807 billion bushels.
  • The USDA forecast U.S. 2005 all-wheat ending stocks at 530 million bushels, below analysts' pre-report average estimate of 572 million bushels.
  • CBOT traders expect soybean futures to open up 3-5 cents, corn futures to open up 1/2-1 cent, and wheat futures to open up 1-2 cents a bushel.

Statistics:

  • U.S. 2005-06 soybean production estimated at 2.967 billion bushels, down 39 million bushels from last year's crop.
  • Domestic crush figure for soybeans raised by 10 million bushels to 1.695 billion bushels.
  • Estimated ending stocks figure for 2005-06 soybeans raised by 55 million bushels to 260 million bushels.
  • U.S. 2005 corn production forecast at 10.857 billion bushels, above the government's September estimate but below last year's record crop.
  • U.S. 2005 all-wheat ending stocks estimated at 530 million bushels, below analysts' pre-report average estimate.

Sources:

  • Dow Jones Commodities News via Comtex
  • USDA
  • CBOT
  • Dow Jones Newswires
  • Andrew Johnson Jr. - By Andrew Johnson Jr.; Dow Jones Newswires; 312-347-4604; andrew.johnsonjr @dowjones.com
  • Dow Jones & Company, Inc.