September 9, 2010

Analysts expect a lower forecast for US soy crop

Most analysts anticipate a modest downward revision in the USDA's 2010 soy crop projection Friday (Sep 10).

"Excessive precipitation in parts of Illinois, Iowa and Missouri and a non-trivial number of anecdotal reports of large-scale sudden-death syndrome losses appear likely to push final yields at least modestly below the USDA's August forecast," said Lewis Hagedorn, analyst with Global Commodities Research at J.P. Morgan Chase Bank in a market note.

The USDA is scheduled to release its September crop report Friday at 8:30 a.m. EDT (1230 GMT).

The average of 24 analyst projections estimates a crop size of 3.406 billion bushels with a yield of 43.8 bushels per acre. The estimates ranged from 3.354 billion to 3.500 billion bushels for production and 43.0 to 44.9 for yields. In August, USDA projected a crop size of 3.433 billion bushels using a yield of 44.0 bushels an acre.

Analysts do not anticipate any major adjustments in USDA's output or yield forecasts, as wide variability in soy yield outlooks is expected to limit movement in USDA projections until the harvest of soy crops in the heart of the Midwest moves ahead.

Above-normal temperatures in the Midwest during the last month and below-average rainfall is a bit negative for crops, but crop ratings did not plummet, a sign consistent with USDA holding yields steady or dropping them just a little, said Bill Nelson, analyst with Doane Advisory Service in St. Louis, Mo.

Yields will remain a sticking point for analysts to debate beyond the September crop report. The true effect of late-season weather is not expected to be truly reflected in USDA crop reports until October or November.