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USDA Raises Forecast of Season-Average Cash Grain Prices Amid Soybean Export Surge

Strategic Insights

— 2 min read

The US Department of Agriculture (USDA) has revised its forecast of season-average cash grain prices, with soybean prices projected to range between $10.70 and $12.20 per bushel, an increase of 70 cents. The agency attributed this rise to increased global import demand and a record sales pace, particularly to China, which accounts for over 70% of known US soybean export sales through October. The USDA also raised its forecast for season-long cash corn prices by 20 cents and lowered its estimate for US soybean production by about 1%.

Key Takeaways:

  • The USDA projects domestic crop output for 2010 at 12.5 billion bushels of corn, 3.38 billion bushels of soybeans, and 2.2 billion bushels of wheat.
  • Soybean exports are raised by 50 million bushels to a record 1.57 billion, driven by increased global import demand and a record sales pace.
  • Domestic soybean ending stocks are projected at 185 million bushels, down 80 million from last month.
  • The agency made a 75 million bushel cut in US corn ending stocks for 2010/11, now pegged at 827 million bushels.
  • Nearby futures are predicted to rise by 30-40 cents a bushel for soybeans, 15-25 cents for wheat, and 10-20 cents for corn.
  • Interior basis markets were mixed, with daily-average gains of 1/2 to 1 1/2 cents for corn/soybeans/soft wheat and losses of 1/4-1/2 cent for hard wheat.
  • National cash price indices maintained at the Minneapolis Grain Exchange showed an average basis of -73 1/2 cents relative to settlement of January Chicago Board of Trade futures.
  • US winter wheat crop ratings deteriorated, and the USDA dropped its estimate of the amount of US winter wheat in good or excellent condition by 1 percentage point to 45%.

Statistics:

  • Projected season-average cash grain prices for soybeans: $10.70 to $12.20 per bushel
  • Increase in soybean exports: 50 million bushels
  • Record sales pace for soybeans: 1.57 billion bushels
  • Domestic soybean ending stocks: 185 million bushels
  • Reduction in US corn ending stocks: 75 million bushels
  • Nearby futures price predictions for soybeans: 30-40 cents per bushel
  • Nearby futures price predictions for wheat: 15-25 cents per bushel
  • Nearby futures price predictions for corn: 10-20 cents per bushel

Sources:

  • Dow Jones Commodities News via Comtex, November 09, 2010
  • USDA November crop report
  • Freese-Notis Weather
  • Mike Zuzolo of Global Commodity Analytics and Consulting
  • Rich Balvanz of AMS Commodities

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