USDA seen lowering corn output

(Agriculture.com) – Analysts expect U.S. government forecasters to  trim their estimate of the size of last year’s corn crop, while  increasing their estimate of soybean production.

The U.S. Department of Agriculture at noon EST Friday will release  key crop reports, including final estimates of the U.S. corn and soybean harvests, the size of domestic grain and soybean inventories as of Dec. 1, and forecasts for grain and soybean inventories this year.

Grain traders will closely watch the figures, which could cause  significant price swings in future markets if they come in above or  below expected levels.

Analysts’ expectations for the USDA production reports have been in a wide range, reflecting difficulty in gauging the status of crops after  the severe U.S. drought battered crops last summer. Analysts are still  debating how many corn acres were abandoned by farmers last year due to  the drought and how much soybean crops benefited from increased rain  late in the growing season.

“I’ve been around this thing a while and I’ve never seen such wide  ranges,” said Sid Love, an analyst with advisory firm Kropf & Love  Consulting in Overland Park, Kan. “It’s such a wide range of estimates  that a surprise is likely. The question is, which side is it going to be on?”

Analysts on average expect the USDA’s final estimate of the corn  harvest to fall 0.9% from its most recent forecast, to 10.626 billion  bushels, the smallest harvest since 2006, according to a poll by Dow  Jones Newswires.

Analysts on average expect a national corn yield of 122.4 bushels an  acre, up slightly from the USDA’s previous forecast of 122.3 bushels an  acre. It would still mark the lowest corn yield since 1995.

Forecasts by the 22 polled analysts ranged from 10.1 billion to  10.801 billion bushels for total production, and 121 to 123.4 bushels an acre for the crop yield.

For soybeans, analysts on average expect the USDA’s harvest estimate  to rise 0.9%, to 2.999 billion bushels, with a national yield of 39.6  bushels an acre, up 0.8% from the USDA’s previous forecast of 39.3.

Forecasts by 22 analysts ranged from 2.922 billion to 3.104 billion  bushels of soybean production, and from 38.6 to 41 bushels an acre for  the crop yield.

For soybeans, the analysts’ production and yield forecasts would mark the smallest figures since 2008 and 2003, respectively.

Besides production numbers, traders will also watch to see how much  the USDA changes its demand forecasts for corn and soybeans. Some expect the USDA to cut its forecast for corn exports in the crop’s marketing  year that ends Aug. 31, since exports have been slow recently.

Due to weaker demand expectations, analysts on average expect the  USDA to raise its forecast for domestic corn inventories at the end of  the current marketing year by 3.1% to 667 million bushels.

The average forecast for soybean inventories as of Aug. 31 is 135 million bushels, 3.8% above the USDA’s previous forecast.

The USDA will also issue an estimate of how many acres of winter  wheat were planted in the U.S. last fall to be harvested late this  spring. Analysts on average expect seedings of 42.6 million acres, up  3.1% from a year earlier.

Weak export demand has pressured wheat futures prices in recent  weeks. Expectations for a larger wheat crop this year could further  weigh on prices.

Analysts on average expect the USDA to trim its forecast for domestic wheat inventories as of May 31, the end of the crop’s current marketing year, by 1.5% to 743 million bushels.

Write to Owen Fletcher at owen.fletcher@dowjones.com

(END) Dow Jones Newswires

January 08, 2013 15:53 ET (20:53 GMT)