August 11, 2004



USDA Seen Raising New US Soy Crop In S/D Report


The size of the new U.S. soybean crop is expected to be raised Thursday in the U.S. Department of Agriculture's monthly supply and demand report to 2.965 billion bushels, with a yield of 40.2 bushels per acre, up from 2.940 billion and 39.9 bushels respectively, in the previous report, according to a survey of industry analysts.


The USDA's August supply and demand report is scheduled for release at 0730 CT (1230 GMT) on Thursday.


In the survey, estimates on soybean production ranged from 2.881 billion to 3.042 billion bushels, and estimates on yield ranged from 39.2 to 41.3 bushels.


Industry analysts agreed that new-crop production will be the key feature in this report, as it will reflect the first government survey of the crop. Unlike last year, the crop thus far has experienced cool and damp weather as opposed to hot and dry conditions, which stunted the growth of the 2003-04 crop.


Because of the non-threatening conditions seen so far in the growing season, industry analysts are anticipating the figure to approach the 3 billion-bushel mark.


"Last year, the crop looked good, smelled good, tasted good, and ended up being no good. It's not delayed like it was last year," said Stewart Ramsey, senior economist at Global Insight at Eddystone, Pa.


Last year's crop was measured at a paltry 2.418 billion bushels.


Ramsey notes, though, that this estimate on the new soybean crop will likely see many changes.


"The number the USDA puts out is subject to incredible revision because there is a lot yet to be known. There's a lot of crop development to take place. We have more flowering and more pod-setting to do."


In the USDA's most recent crop progress report, 69% of the soybean crop was in the pod-setting stage, compared to the five-year average of 65%, and 92% of the crop was in the blooming stage, compared to the five-year average of 91% at this point of the growing season.


U.S. soybeans ending stocks are seen at 251 million bushels with estimates ranging from 199 million to 290 million. The figure is up from the 210 million in the previous report.


Meanwhile, the old-crop balance sheet will not likely garner much attention, said Anne Frick, oilseeds analyst for Prudential Securities in New York, as the ending stocks figure will still remain very tight.


"Even though we have to live with the fundamentals a little while longer, the market has decided it is pretty much a dead issue. It's incredibly tight, and we've known that for a long, long time," she said.


However, some adjustments are to be expected to account for the U.S. Census Bureau's earlier miscalculation of exports to Mexico, Frick said, with the USDA likely decreasing exports by about 15 million while at the same time adding more room to the crush figure by about 10 million bushels. Two weeks ago, the Census Bureau announced that exports to Mexico were overstated by 26.37 million bushels.