Crop Stats From Gartman Letter
Acknowledging China has been a much
more active buyer of U.S. soybeans
than expected, USDA made yet another
upward revision in its 2007/08 export
projection – this time by 20 million
bushels. This drops the ending stocks
projection down to a scant 140 million
bushels, which is only a 3-week
supply. A carryover that small makes
it even more imperative that more than
70 million acres go into soybean
production this year and that growing
conditions are generally favorable.
The wheat export prediction was raised
by a hefty 25 million bushels and USDA
bumped its wheat-for-food usage
estimate by 5 million bushels. These
changes pull the wheat carryover
estimate for the current year down to
only 242 million bushels. That figure
is more than 20 million bushels
smaller than the average pre-report
trade estimate.
The usage numbers for corn were not
revised, even though there’s some
evidence high prices are trimming
production plans in the
livestock/poultry industries and
perhaps ethanol. The upcoming
quarterly Grain Stocks Report will
provide a good picture of how much
corn disappeared during the second
quarter of the marketing year.
Interestingly, while some of the U.S.
stocks estimates shrank from a month
earlier, USDA raised its global ending
stocks figures for all of these
commodities. The Brazilian soybean
crop was raised from 60.5 to 61 mmt,
but many observers in South America
say thanks to good yields the crop
will be even larger than that.
The downward revision in the wheat
carryover estimate is not the only
bullish news at work in wheat futures
today. Turkey has issued a tender for
500,000 tons of wheat and at least
half of that amount is to be U.S. hard
red winter wheat. Japan continues to
be a consistent buyer of wheat,
regardless of price and Iraq is
expected to buy more wheat in the near
