September 14, 2006

 

US soy and crops expected to be second largest on record as rain pours

 

 

Faint hopes are turning into concrete expectations as August rains drenched much of the plains in the Midwest, leading the USDA to predict this year's soy and corn crops would be the second largest ever.

 

A soy crop of 3 billion bushels, up 5.6 percent from the August estimate, is expected, the USDA said, while the corn crop would be up 1.3 percent from the August forecast to reach 11.1 billion bushels.

 

The rains, besides bringing relief to farmers worried about drought, also cooled prices for corn and soy, with both having fallen from levels seen in mid-July.

 

Corn for December delivery fell to the lowest closing price in three weeks while soy for November delivery fell to the lowest close for the most-active futures contract since February last year.

 

Rains since the third week of July boosted corn kernel weights and increased soybean yields, the government said.

 

Corn yields are expected to average 154.7 bushels per acre, up 2.5 bushels from August and 6.8 bushels from last year.

 

If realised, 2006 would be the third consecutive year corn growers have topped 11 billion bushels, said NCGA President Gerald Tumbleson.

 

With last year's carry over and this year's crop, corn producers would produce more than enough corn to supply all markets this year, Tumbleson said. 

 

Iowa is projected to be the leading state in corn production, with 2.16 billion bushels. Illinois is predicted to harvest nearly 2 billion bushels.

 

Despite significant drought in some areas, South Dakota and Texas average yields were increased this month to 105 and 116 bushels per acre, respectively. In August, The National Agricultural Statistics Service (NASS) projected South Dakota's average yield at 100 bushels per acre and Texas' average yield at 108 bushels per acre.

 

Indiana and Ohio are still expected to book record yields at 167 bushels per acre and 160 bushels per acre.

 

Nebraska and Minnesota are projected to be third and fourth in corn production this year. Nebraska is predicted to bring in 1.2 billion bushels, and Minnesota is expected to harvest 1.1 billion bushels.

 

On the other hand, the rains would probably wash away a US$6.5 billion drought relief plan currently being discussed in Congress, which is opposed by the Bush administration.

 

However, a US$780 million aid package would probably remain, as would other payments already planned.

 

Even as the USDA wants to see how the fall harvest goes before committing to more aid dollars, some are asking for aid now.