USDA to slash US corn, soy output forecasts

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Publish time: 12th September, 2013      Source: www.cnchemicals.com
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September 12, 2013

   

   
USDA to slash US corn, soy output forecasts
   
   

   

Following the dry, hot weather across the farm belt that stressed crops in August, market watchers expect the USDA to lower its forecast for the size of this year''s US corn and soy harvests.

   

   

The unfavourable weather has led many analysts to expect a sharp drop in this month''s soy production estimates. Analysts see the corn crop as less vulnerable to dryness because it largely underwent its main development phase in July.

   

   

The USDA will update forecasts for corn, wheat and soy. Analysts will closely watch the projections for corn and soy crop yields and total output.

   

   

Due to persistent hot, dry weather in major oilseed producing states such as Minnesota, Iowa and Illinois, which were hit recently by a flash drought, market watchers expect the USDA to lower its forecast for soyproduction.

   

   

According to a Wall Street Journal survey, analysts on average expect the USDA to cut its forecast for soy output to 3.15 billion bushels, a 3.3% decline from its projection last month of 3.255 billion bushels. The USDA is expected to pare its forecast for soy yields to 41.3 bushels an acre, a 3.1% drop from its last forecast of 42.6 bushels.

   

   

Tim Hannagan, an analyst with Walsh Trading Co. in Chicago, said he thinks the USDA will lower projected corn and soy yields significantly because weekly crop-progress reports by the agency recently have shown deteriorating conditions. Those assessments are based on visual observations of fields.

   

   

In the most recent report of crop development across the farm belt, the USDA rated 52% of the soy crop in "good" or "excellent" condition, down from 64% at the start of the month.

   

   

Meanwhile, cool temperatures across the Midwest in much of July eased stress on the nation''s corn crop, while it underwent its crucial pollination phase, which determines the number of kernels on each ear of corn. This has had the effect of moderating anticipated damage to the nation''s cornfields.

   

   

Analysts expect the USDA to lower corn''s estimated production to 13.65 billion bushels, down 0.9% from its forecast last month of 13.76 billion bushels. That would still be a record high for a US corn crop. When the worst US drought in decades curtailed output last year, production was 10.78 billion bushels.

   

   

Analysts expect the government to forecast a corn-crop yield of 153.9 bushels an acre, down 0.3% from the USDA''s forecast last month of 154.4 bushels an acre.

   

   

Parts of the Midwest and Great Plains, stretching from Nebraska through Iowa and western Illinois, are struggling with dryness although drought conditions in the farm belt this summer are much less widespread than a year ago. Heavy spring rainfall in the Midwest left crops with healthy levels of soil moisture to draw on, but meteorologists said the recent dry spell has resulted in some places experiencing conditions similar to those of 2012.