Futures prices for corn and oats rose today after the U.S. Department of Agriculture surprised the market by reducing its estimate of corn seeded acres.
July corn briefly hit a record high of $7.93 US per bushel shortly after the open but then edged back, but was still up 23.5 cents at $7.875 at 11:15 CST. Chicago July oats were up nine cents at $3.92 per bushel.
USDA lowered its seeded acreage forecast to 90.7 million acres, down from 92.2 million in May.
Many traders had thought USDA would wait until its planting report June 30 to make adjustments to reflect the difficulty farmers have had with seeding in wet weather.
Corn was also supported by reduction in the ending stocks forecast for the new crop.
Although it kept its 2010-11 U.S. ending corn stocks steady at 730 million bushels it lowered its 2011-12 forecast to a very tight 695 million bu., below an average of analysts’ estimates for 771 million and below the outlook in May for 900 million.
Total corn production was forecast at 13.2 billion bu. down 305 million from last month’s forecast but still record production.
Oilseeds initially rose along with corn, but then turned down on profit taking and on bearish news in the USDA report.
USDA raised its estimate of 2010-11 U.S. soybean ending stocks to 180 million bu., above the average of analysts’ estimates for 176 million and above the USDA May outlook for 170 million.
USDA raised its estimate of 2011-12 U.S. soy ending stocks to 190 million bu., above the average of analysts’ estimates for 170 million and above the USDA outlook in May for 160 million.
USDA also surprised the market with its forecast for the winter wheat crop, which has suffered from drought. It put production at 1.45 billion bu., above analysts’ estimates for 1.39 billion and above the May outlook for 1.42 billion.
