Ahead Of The USDA

In case you have been living an a cave for the past couple of weeks, you might like to know that the USDA are out later today with revised US crop production estimates for 2009 for soybeans and corn, plus ending stocks for beans, corn and wheat. In addition to that they are out with their latest world crop production estimates too.

The market is hoping for some direction, but what is the betting that the numbers end up being viewed as "predictable" and "unexciting" and we subsequently end up hanging on for the next set of tit-bits, the March 31st planting intentions report?

That's where my money is going already.

It isn't beyond the realms of possibility that the USDA might chuck in another curve ball and raise corn production rather than lower it either. That's what they did in January and corn has hardly stopped falling since.

If you want the pre-report estimates then soybean production ranges from 3.219 to 3.365 billion bushels and 161 to 217 million bushels for ending stocks. The average is around 3.349 billion bushels with an average carryout of around 195 million bushels.

For corn we are looking at a range from 12.838 to 13.158 billion bushels for production and 1.602 to 1.814 billion bushel for the 2009/10 carryout. The average corn crop estimate is 13.081 billion bushels. Ending stocks are projected at virtually unchanged from last month at 1.716 billion bushels.

For wheat ending stocks estimates range from 876 to 1,012 million bushels, with the average guess at 971 million, 10 million down on last month.

Last month they pegged Brazilian soybean production at 66 MMT, this week we've had estimates of 67.57 MMT from Conab and 66.9 MMT from the IBGE, so it appears that there could be some possibility in the USDA adding a further million to their estimate here. Even so, some private forecasters are saying that 64-65 MMT is likely to be nearer the mark.

Argy soybean production was pegged at 53 MMT last month, I can't see that changing today.

The only other numbers that I am interested in are what they say for Chinese wheat and corn production for 2009, after their attache came out with estimates of 106 MMT and 150 MMT late last week. Those figures are 8.5 MMT and 5 MMT respectively lower than the USDA's February numbers.

Will the USDA concur? Probably not, particularly on wheat as it might make them look a bit stupid. They haven't been anywhere near 106 MMT for the past year.