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Crop report sends jolts through soybean market

By Janet Kubat Willette

Date Modified: 11/22/2013 11:37 AM

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MINNEAPOLIS -- Friday's USDA Crop Production report brought the most excitement to the soybean market, said Mike Krueger, of The Money Farm during a Minneapolis Grain Exchange conference call.

Soybean prices were all over the place following the report's 11 a.m. release, up as much as 30 cents per bushel at one point.

Soybean yields per bushel were up to 43 from the September forecast of 41.2 bushels per acre, Krueger said. That was partially offset, however, by the decline in harvested acres. Harvested area in the United States is estimated at 75.7 million acres, down 1 percent from both the previous forecast and last year.

The market is somewhat bullish, Krueger said, because of soybean demand. The demand for soybeans hasn't slowed, and U.S. exports are at all-time records.

The USDA also left unchanged the production numbers for Brazil and Argentina and the Chinese soybean import forecast.

On the corn side, the market was anticipating a yield increase, Krueger said. That materialized, with the forecast yield jumping to 160.4 bushels per acre, up from 155.3 bushels per acre in the September forecast. This, too, was somewhat offset by the decline in harvested acres, he said.

Nationwide, the area harvested for grain is forecast at 87.2 million acres, down 2 percent from the previous forecast.

The 2013 corn crop is estimated to set a new production record of 14 billion bushels, USDA's National Agricultural Statistics Service reported. This is 30 percent ahead of last year's drought-effected crop production.

"This year's yield and record crop highlight the astonishing innovation and technological change occurring in agriculture," said Bob Dinneen, president and CEO of the Renewable Fuels Association, in a press release. "This historic crop underscores the urgency of maintaining demand. Now more than ever, the Renewable Fuel Standard must stand as is."

Corn-ending stocks are projected to hit 1.89 billion bushels, the highest since 2005, and corn prices are projected at $4.10 to $4.90 per bushel.

Krueger suspects farmer sales will remain light, as the report wasn't as bearish as feared by many in the trade.