November 9, 2011 by staff 

USDA, Federal crop forecasters didn’t deliver any surprises, making only slight tweaks in their outlook for U.S. grain supplies.

The U.S. Department of Agriculture’s monthly crop report has whipsawed commodity markets much of the year as the agency made deep cuts in the projected size of corn inventories and the U.S. crop. So while supplies of the grain remain historically tight, and the USDA left its price forecast for corn unchanged, the report had limited effect on grain markets.

“It was boring for a change,” wroteanlysts at INTL FCStone in a note to clients.

Forecasters lowered the outlook for the U.S. corn crop, cutting the projected size by 1% to 12.31 billion bushels. Yet they also reduced the outlook for corn demand, saying chicken farmers are buying less feed as they cut the size of their flocks in the face of a supply glut.

The end result was the USDA made a 2.7% cut in projected end-of-season inventories to 843 million bushels.

U.S. farmers are expected to harvest the fourth-largest U.S. corn crop on record, yet the size is driven by increased plantings rather than more productive fields. The USDA expects farmers on average to produce 146.7 bushels per acre, the lowest average yield since 2003.

Grains traders mostly looked past the report, as equity and commodity markets broadly sold off on concerns about the European debt crisis spreading to Italy. Corn futures for December delivery at the Chicago Board of Trade were down 11.5 cents, or 1.7%, to $6.49 per bushel, while soybean futures for January delivery were down 1.5% to $11.8750.

“I don’t think there’s enough on either the bull or the bear side to sink your teeth into it,” Chad Henderson, ananlyst with Prime Ag Consultants, said of the USDA report.

The USDA didn’t increase its prediction for U.S. corn exports, with the figure remaining at 1.6 billion bushels. But forecasters did raise the outlook for Chinese imports.

The USDA now expects China to import three million metric tons of corn in the current marketing year, which began Sept. 1. That is a sharp increase from the two million tons the agency predicted just a month ago, and an even bigger leap from the 980,000 tons China imported in the previous marketing year.

In Wednesday’s report, the USDA also trimmed its production and yield forecasts for wheat and soybeans.

Excessive rains brought sharp delays for wheat farmers in northern Plains states. The agency did an additional round of surveys in late October, with the USDA again lowering its production forecast.

U.S. wheat farmers are now expected to produce 1.999 billion bushels of wheat, down from the October forecast of 2.008 billion bushels. And the new yield estimate is 43.7 bushels per acre, down from 43.9 bushels per acre.

Meanwhile, the USDA lowered its forecast for U.S. soybean production slightly to 3.046 billion bushels, from 3.06 billion bushels. But the USDA also lowered projected soybean exports, raising its forecast for end-of-season soybean inventors to 195 million bushels.

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