Most grain prices remained strong following the Oct. 11 release of the
latest United States Department of Agriculture report of crop
production and supply and demand.
There was nothing in the report to undermine commodity prices, and
that’s a good thing, market analysts say.
“It confirms the tightness of the U.S. (wheat) situation,” said
Canadian Wheat Board market analyst Dwayne Lee.
“The market was expecting this.”
For wheat, the USDA confirmed the smallest U.S. crop in three decades
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and forecasted a drop of two million tonnes in Australian production
and exports from the September report. That was offset by a one million
tonne increase in production and exports in both India and Russia.
World wheat ending stocks for 2002-03 should fall to 131.2 million
tonnes, down from the USDA’s September projection of 135.5 million
tonnes.
The soybean production estimate was little changed from last month’s
estimate, mildly surprising to traders who expected an increase.
The USDA found that the American corn crop is 121 million bushels
larger than it expected in September, but still far smaller than last
year’s crop. World corn ending stocks will be slightly larger than
projected in September.
Alberta Agriculture market analyst Charlie Pearson said feed prices
should remain firm because of low U.S. corn stocks.
The USDA October report gives markets a clearer picture of the 2002
harvest, Pearson said, but the market is more interested in other parts
of the equation.
“The market will probably go more after the demand side, exports,
domestic use,” Pearson said.
Analysts will also closely watch the South American soybean crop and
the acreage in the U.S. devoted to winter wheat. The markets don’t
expect there to be much else to learn about the state of the U.S. 2002
crop.
“This was almost a non-event,” Pearson said.
