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News Flash: August 14, 2014

INDUSTRY

U.S. Department of Agriculture forecasts record-high corn and soybean production in 2014 – Cotton production also up from 2013

U.S. soybean producers are expected to produce a record 3.82 billion bushels in 2014, up 16 percent from last year according to the Crop Production report issued by the USDA’s National Agricultural Statistics Service (NASS). Growing conditions were conducive for corn growers who are also expected to produce a record-high crop at 14.0 billion bushels of corn, up 1 percent from 2013 which was also a record. The report also included the first production forecast for U.S. cotton. NASS forecasts all cotton production at 17.5 million 480-pound bales, up 36 percent from last year’s 12.9 million bales. NASS surveyed nearly 25,000 producers across the country in preparation for this report. The agency also conducted field and lab measurements on corn, soybeans, cotton in the major producing states, which usually account for about 75 percent of the U.S. production. SeedQuest

 

SOYBEAN

Forecast for Record Soybean Crop Pressures Prices

Soybean prices fell nearly 2% as government forecasters estimated this year’s crop would be by far the largest in history. Corn rose modestly after USDA projected lower-than-expected yields. Soybeans snapped a four-session winning streak after the USDA estimated this autumn’s U.S. harvest would reach a record 3.82 billion bushels, roughly in line with analysts’ estimates. The government said soybean yields would hit a record 45.4 bushels an acre. U.S. soybean stockpiles in the 2014-15 season will more than triple from a year earlier, the USDA estimated, eliminating concerns about low inventories that have plagued food producers and other soybean buyers for several years. The USDA estimated the corn harvest at 14.03 billion bushels, which would break last year’s record of 13.93 billion. But the agency surprised analysts by forecasting average corn yields at 167.4 bushels per acre, breaking the record 164.7 in 2009 but below expectations of about 170 bushels an acre. The USDA didn’t elaborate on the factors that led to its yield forecast.Wall Street Journal

 

CORN

Corn Futures Jump as Traders Brace for Government Crop Report

Corn futures rallied on Monday as investors who had bet on lower prices bought back contracts and closed positions ahead of a government report on Tuesday. Analysts surveyed by The Wall Street Journal said the USDA will place corn production at 14.2 billion bushels on yields of 170 bushels an acre, both records, in a monthly supply-and-demand report set for release at noon on Tuesday. About three-fourths of the U.S. corn crop was in good or excellent shape as of Sunday, according to the USDA, due to rainy, cool weather through most of the growing season. Also underpinning prices is a lack of selling by farmers, which reduces the amount made available to ethanol makers, livestock feeders and exporters.Wall Street Journal

Corn Set for Longest Rally in Six Months on Crop Estimate

Corn futures rose, heading for the longest rally since February, after government data showed yields trailed estimates by analysts for crops in the U.S. On Aug. 12, the USDA said that corn yields will average 167.4 bushels an acre, compared with 170.2 bushels predicted in a Bloomberg survey. As of Aug. 10, 73 percent of the crop was rated in good to excellent condition, the highest for the week since 2004, USDA data revealed. Corn futures for December delivery rose 1.1 percent to $3.7375 a bushel on the Chicago Board of Trade. Earlier, the price reached $3.745, the highest for a most-active contract since Aug. 6. The grain headed for the fourth straight increase, the longest rally since Feb. 20. In the four weeks ended Aug. 7, corn exports for delivery in the 12 months that start Sept. 1 jumped 42 percent from a year earlier, USDA data showed today. Bloomberg

 

PALM

Palm weak on worries over record US soybean supply

Malaysian palm oil futures edged down on Wednesday to hover around their lowest levels in more than a year, stained by projections of bigger-than-expected supplies of rival oilseeds, which could impact demand for the tropical oil. The US Department of Agriculture (USDA) estimated on Tuesday that US soybean stocks would end the 2014/2015 marketing year at 430 million bushels, surpassing market expectations of 414 million. Bigger supplies for crushing would weaken soyprices and potentially channel food and fuel demand away from palm. Reuters

 

CANOLA

Canola supply could be tight with demand on the rise

Sales prospects are good for new crop canola, given the expectation for a strong export program combined with a smaller than anticipated carryout from the 2013-14 crop, says an analyst. Canola prices this autumn could be stronger, but much will depend on how the market reacts to a potential huge U.S. crop. Importers have already purchased a sizable portion of the 2014 canola crop for the fall-to-December delivery period, said Brian Voth, senior market coach with Agri-Trend Marketing. Much of the demand is coming from China because canola is competitively priced compared to soybeans. “I also think that last year’s carryout is substantially lower than a lot of people think it is,” Voth said. Agriculture Canada’s July forecast was three million tonnes of canola carryout from the 2013-14 crop. Voth believes it will be closer to 1.75 million tonnes because he asserts that growers did not harvest the bin-busting 18 million tonne crop reported by Statistics Canada. Statistics Canada will release its July 31 stocks report on Sept. 5 which may shed light on the carryout situation. Canada may be facing reduced competition from other suppliers as well. Reuters reports that Ukraine’s rapeseed exports will fall by 17 percent compared to last year due to a smaller harvest. Nick Goddard, executive director of the Australian Oilseeds Federation, said the federation is rethinking its June estimate calling for a 3.9 million tonne canola crop due to extreme dryness in northern New South Wales. Goddard also noted that growers are heading into a potentially drier than average spring due to El Nino. The Western Producer