If you missed my letter on Friday, please go back and look at it.
Grain markets operate differently in different economic environments. We have been alerting readers for months that the environment has moved away from the fear of inflation. Last week the fear of deflation moved to the front burner and grain producers need to pay attention.
Time will tell how the economic uncertainty unfolds, but we have been telling you for months to be prepared for grain surpluses and now we have economic worries to boot. Besides it is early July and we always batten down the hatches at this time of the year.
Friday the USDA will give us their July Production and Supply Demand Reports. Informa gave us their estimates on Friday.
Informa used the same U.S. corn yield estimate as the USDA did on its June Report of 163.5 bushels per acre. This was 1.6 bushels per acre above their previous number, and 1.2 bushels per acre below last year. Using the USDA acreage decline gave Informa a 13.241 billion bushel production forecast, up 131 million from 2009.
Informa’s soybean yield of 43.4 bushels per acre was half a bushel above the USDA and 0.2 bushels per acre above their previous forecast, with a production estimate of 3.385 billion bushels marking a 26 million bushel increase from 2009.
Informa pegged the all wheat yield at a record 45.9 bushels per acre, a full two bushels ahead of the USDA, with production at 2.217 billion bushels, up 150 million bushels from the USDA and now slightly ahead of last year.
Argentina’s Ag Ministry reported soy harvest at 99% complete as of Thursday, unchanged from last week due to rains, and behind last year’s 100% mark. The Argentine corn harvest reached 91% completion, 2% ahead of last week but 3% behind last year.
Private analysts Celeres increased their Brazilian soybean estimate again to 68.5 million tons, up from 68.2 million tons previously and 58.1 million tons last year.
The U.S. Dollar index is slightly lower continuing its decline from last week’s breakdown of its trading range.
