12 August 2010 15:41 [Source: ICIS news]
HOUSTON (ICIS)--US production of major crops will increase this year as world stocks of those commodities decline, the US Department of Agriculture (USDA) said on Thursday in its crop production report.
The report sent futures prices for corn, soybeans and wheat higher at the opening of commodity exchanges on Thursday. At the Chicago Mercantile Exchange, nearby corn was up 4 cents/bushel from the previous day at $4.00/bushel, soybeans were 6 cents higher at $10.22/bushel, and wheat was 18 cents higher at $7.13/bushel.
Overall, USDA said the production of corn, soybeans and wheat would increase by 2% this year relative to 2009.
However, the World Agriculture Supply and Demand Estimate report, also released by USDA on Thursday, indicated that global wheat supplies for 2010-2011 would drop sharply, with world production lowered 15.3m short tons (st), mostly on reductions for FSU-12 (Former Soviet Union) and EU-27 (European Union) countries.
Production for Russia was lowered by 8m st, as continued extreme drought and record heat conditions during July and early August further reduced summer crop prospects.
Kazakhstan production was reduced by 2.5m st, reflecting the same adverse weather conditions as in Russia.
Ukraine production was lowered 3m st, as heavy rains damaged maturing crops and hampered harvesting in western and southern growing areas.
Harvest results also supported indications that producers had reduced the use of inputs such as fertilizer in response to limits on available capital.
Yields were reduced for northwest Europe on untimely heat and dryness, while yields were lowered for southeastern Europe as heavy rains reduced output.
Production estimates were also lowered for Algeria, Brazil, Uruguay, Belarus, and Croatia.
Meanwhile, US corn production was forecast at a record high 13.4bn bushels, up 2% from the previous record set in 2009, USDA said.
Corn yields were expected to average a record-high 165.0 bushels/acre, up 0.3 bushels from last year’s record of 164.7.
Soybean production was forecast at a record high 3.43bn bushels, up 2% from last year, with yields expected to average 44 bushels/acre, unchanged from last year’s record-high yield.
Area for harvest in the United States was forecast at 78m acres, unchanged from June but up 2% from 2009.
All US wheat production, at 2.26bn bushels, would be up 2% from the July forecast and up 2% from 2009.
Wheat yield is forecast at 46.9 bushels per acre, up 1.0 bushel from last month and 2.5 bushels above last year. If realised, that would be the highest yield on record, 2.0 bushels above 2008.
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