November 12, 2004

USDA to Increase Soy Crop Size to 3.140 Billion Bushels

US 2004-05 soybean production is projected to increase to 3.140 billion bushels in the US Department of Agriculture's November crop production report. This is due to promising yields seen during soybean harvest in the US, according to a survey of industry analysts.
 
The USDA's November report is scheduled to be released at 0730 CT (1330 GMT) Friday.
 
The average estimated production figure is a 33-million-bushel increase from the October report. Estimates in the survey ranged from as low as 3.107 billion bushels to as high as 3.195 billion.
 
The probable increase in the size of the crop is because of improving yields seen across the US Midwest as the end of harvest approaches, said Joe Victor, industry analyst at Allendale in McHenry, Ill.
 
"One of the things we're finding out as the harvest progresses farther north, we're seeing good yields," Victor added.
 
In the October report, the USDA said the average soybean yield was 42 bushels per acre. In the industry survey prior to the November report, analysts said the yield will increase to 42.4 bushels.
 
"The weather conditions were ideal for harvest, but some were complaining of weather being too drying," Victor pointed out. "But we got some rains that swelled the crops back up again."
 
But Tim Hannagan, head grain analyst at Alaron Trading Co. in Chicago, said the crop will only see a minor shift upward due to yields in the north held in check by cold weather and incidents of frost. On the whole, soybean crop improved traveling south through the soybean belt. Nevertheless, most analysts surveyed predicted an increase over the previous report, lending credence to the adage "big crops get bigger."
 
On the balance sheet, analysts predict only minor adjustments to be made as it is too early in the season to make significant changes to figures like exports and domestic crush. The one number on the balance sheet that will likely see a notable modification is year-end inventories, which are currently figured to be the biggest since 1986 when stocks totaled 436 million bushels, analysts said.
 
"On the balance sheet, our biggest concern boils down to the end stocks," Victor said, explaining that the figure will indicate how much in reserve the US will have to work with in the future.
 
According to the survey, 2004-05 soybean ending stocks are seen rising to 462 million bushels in this report, up from 405 million reported in October to account for the growing production number. Industry estimates ranged from 406 million to 556 million bushels.