GRAINS-U.S. wheat drops on dollar, weather outlook

* Wheat falls to near one-week low on dollar, weather
* Soy down 0.4 pct, falls from 26-month peak
* Corn extends losses, down 0.7 pct to a two-week low
* EU wheat weaker, follows U.S. down
(Adds European session, updates prices, dateline pvs SINGAPORE)
By Michael Hogan
HAMBURG, Nov 10 (Reuters) – Chicago wheat futures slid almost one percent on Wednesday to a near one-week low as a firmer tone for the dollar and an outlook for rains in U.S. winter crop areas weighed on the market. >>>>> More

Commodities Soar As Surging Demand Meets Dwindling Supplies

A broad array of commodities hit multiyear highs as producers of metals and agricultural goods are finding it increasingly more difficult to meet robust demand. >>>>> More

Soft Commodity Technicals by Reuters

Published on November 10, 2010 by admin   ·   No Comments  

WHEAT
SINGAPORE, Nov 10 (Reuters) – The CBOT wheat December contract is expected to retrace further to $6.90 per bushel as the sharp drop on Tuesday is likely to continue. >>>>>> More

Agricultural Futures Climb On USDA Report, Led By Soybeans, Cotton

U.S. soybean futures surged to a 26-month high Tuesday as federal forecasters cut estimates for this year’s harvest in a crop report that showed tightening supplies across agricultural commodities. >>>>>>> More

Gold hits record in rush to commodities

SOFTS HIT HIGHS
Raw sugar futures on ICE set a 30-year high on Tuesday while arabica coffee climbed to a 13-year peak. The sugar market has surged in recent months, with prices more than doubling since May, as expectations for a rise in output failed to materialize due to bad weather, sparking concern over low stocks.
March raw sugar futures on ICE rose to a peak of 32.68 cents a lb, a 30-year high for the benchmark front month, before easing back to 32.63 cents. >>>>>> More

Soft Commodity Technicals by Reuters

WHEAT:

SINGAPORE, Oct 21 (Reuters) – CBOT December wheat <WZ0> is technically neutral between $6.73 and $6.93, with an escape from the range needed to determine its next directional move.

Soybean Technicals from Reuters

   

SINGAPORE, Oct. 18 (Reuters) - A bullish target at $12.26 per bushel for the CBOT soybean November futures contract has been aborted as a five-wave cycle could have been completed at the Friday high of $12.04-1/4.

A bearish target has been established at $11.42-1/4, the 38.2 percent level, as per a Fibonacci retracement analysis, on the rise from $10.42 to $12.04-1/4. 

A minor support is observed at $11.66, the 23.6 percent level, but it could be too vulnerable to hold the fall.

Resistance is at $11.90, a break above which would slightly extend its gain to $12.00.

   

Soybean Technicals from Reuters

 

   

SINGAPORE, Oct 15 (Reuters) - A bullish target at $12.26 per bushel for the CBOT soybean November futures contract <SX0> is unchanged, as it has stood above a consolidation channel between $11.50-¾   and $11.88-3/4.

The projected target is based on the price difference between the high and the low of the channel.

The wave pattern indicates a wave "5" is running up towards a more aggressive target at $12.80 in the medium term, as pointed by an ascending trendline, confirming the move towards $12.26 in short term.

Support has shifted up to $11.78 from the previous level of $11.70, and a break below would extend losses to $11.50-3/4, the low of the range.

Soybean Technicals from Reuters

SINGAPORE, Oct. 14 (Reuters) - The CBOT soybean November futures contract <SX0> is expected to rise towards $12.26 per bushel as per its wave pattern and a range between $11.50-¾    and $11.88-3/4.

A wave "5" is progressing towards a medium-term target at $12.80, as pointed by an ascending trendline, while a conservative $12.26 level is considered as a 24-hour target.

Support is at $11.70, a break below which would trigger a further retracement to $11.50-3/4, the low of the range.

Argentina Soyoil Exporters View End To China Spat With Wary Eye

Argentina's soyoil exporters are cautiously optimistic that China is poised to resume its purchases of soyoil, but they are waiting to see an actual sale go through before celebrating an end to the six-month old trade dispute.

An executive at one of Argentina's leading grain and vegetable oil said he is waiting to "see it to believe it."

In April, China--the world's largest importer of the edible oil--blocked imports from Argentine--the largest exporter--citing purity standards. But many saw the move as retaliation for a host of anti-dumping duties imposed by Argentina on imported Chinese goods.

Fueling scepticism over the resumption of soyoil sales is the fact that there seems to have been no progress in resolving the underlying conflict over trade barriers. In fact, Argentina has expanded the number of Chinese products hit by anti-dumping penalties in recent months.

Despite the tension, the Chinese appear to be more concerned with their domestic food prices. China is facing high inflation and Argentine soyoil is cheaper than what it is now buying from the U.S. and Brazil, said Ricardo Baccarin, vice president at local brokerage house Panagricola.

A senior trader with a large Chinese grain buyer said Tuesday that China's government is clearing new soyoil imports from Argentina, although no purchases have taken place yet.

China's Ministry of Commerce would support the resumption of soyoil imports from Argentina as long as there are no quality concerns, said Chen Rongkai, a ministry media official.

Argentine President Cristina Fernandez celebrated the news in a twitter post on Tuesday. "If it wasn't enough, China is buying oil again," Fernandez wrote.

Agriculture Minister Julian Dominguez told state news agency Telam on Monday there were signs that China would allow shipments to resume, although a foreign ministry spokesman on Tuesday declined to comment.

A resumption of sales to China would be a boon to Argentina's farmers, who were slow to sell this season and still have significant soybean stocks remaining, Panagricola's Baccarin said.

Corn Drops as U.S.Harvest Progresses, Four-Day Jump Prompts Investor Sales

Corn dropped for the first time in five days as the U.S. harvest advanced and some investors sold the grain after a 19 percent rally driven by a lower crop estimate from the Department of Agriculture. 

The December-delivery contract lost as much as 0.5 percent to $5.7625 a bushel on the Chicago Board of Trade, and traded at that price at 1:03 p.m. in Singapore. The contract had surged from $4.885 a bushel on Oct. 6 to yesterday’s close of $5.79.

About 51 percent of the corn crop was harvested as of Oct. 10, up from 37 percent a week earlier and the previous five-year average of 30 percent, the USDA said yesterday. On Oct. 8, the USDA cut its corn-crop estimate for a second time in as many months, predicting a harvest of 321.7 million metric tons.

“We expect the harvesting progress to be smooth,” Chung Yang Ker, an analyst at Phillip Futures Pte. in Singapore, said by phone today. In addition, “we cannot rule out profit- taking” by some investors after the surge, Ker said.

December-delivery wheat was little changed at $7.095 a bushel in Chicago after swinging between gains and losses. Soybeans for November delivery declined as much as 0.6 percent to $11.72 a bushel, and traded at $11.76.

About 67 percent of the U.S. soybean crop had been collected as of Oct. 10, up from 37 percent a week earlier and the five-year average of 48 percent, the USDA said yesterday.

Ukraine’s government may start grain-export quotas in about 10 days to avoid higher prices, Deputy Prime Minister Viktor Slauta said yesterday. Ukraine was last year’s second-largest wheat exporter in the former Soviet Union and the largest corn shipper, according to data from the USDA.

Ukraine Exports

The country may ship 500,000 tons of wheat, 2 million tons of corn and 200,000 tons of barley by Dec. 31, the Kiev-based Economy Ministry said on Oct. 11 in a draft resolution on its website. The ministry wants to limit total grain shipments to 2.7 million tons through the end of the year to cool local prices and prevent a domestic shortage.

Rough rice for November delivery climbed as much as 0.6 percent to $13.46 per 100 pounds in Chicago, extending yesterday’s 2.9 percent advance. Rice touched $13.515 on Oct. 11, the highest price since March 3.

Futures may advance as high as $17 per 100 pounds by January on concern U.S. milled-rice production may be at least 10 percent smaller than the USDA estimated after dry weather cut yields, Dwight A. Roberts, president of the U.S. Rice Producers Association, said on Oct. 11. Roberts correctly predicted last year that the grain would peak at $16.

A weaker dollar may also support grain and soybean prices as it makes commodities priced in the U.S. currency cheaper for overseas buyers, Phillip’s Ker said.

The Dollar Index, which tracks the greenback against the currencies six major trading partners, fell for a second day after minutes of the Federal Reserve’s September meeting showed monetary policy may be eased further “before long.”

“With that quantitative easing, we might see the U.S. dollar weaken further,” Ker said. “This could boost the prices of commodities denominated in U.S. dollars.” 

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

Soybean Technicals from Reuters

SINGAPORE, Oct. 13 (Reuters) - The CBOT soybean November futures contract <SX0> is expected to break above Monday's high at $11.88-¾   per bushel and rise towards $12.26 thereafter.

A flat consolidation following a sharp rise is generally a continuation pattern before the establishment of a new rally, in the case of soybeans, so as long as it remains above $11.50-3/4, the bullish view would remain unchanged.

A fall below $11.50-¾   could confirm a double-top, and a further retracement to $11.13 will be likely, while a rise above $11.88-¾   would immediately open the way towards $12.26.

Soybeans Technicals from Reuters

SINGAPORE, Oct.11 (Reuters) - The CBOT soybean November futures contract will rise to $12.20 per bushel as a fierce wave "3" is advancing.

The rally confirmed a wave "3" mode, even though fundamentally the strong bull run was triggered by a cut in the USDA crop forecast.

The bullish momentum may extend into the next few trading sessions, to push the price higher until an obvious bearish reversal signal forms on the daily chart, and until then, the basic assumption will be that the uptrend is intact.

Asia Commodity Day Ahead: Commodities Soar as Crop Outlook Cut

Oct. 11 (Bloomberg) -- The following are the top stories on metals, agriculture and shipping.

ECONOMIC EVENTS, AGRICULTURE REPORTS:

TOP STORIES:

Commodities Soar as Crop Forecasts Cut, U.S. May Buy More Debt

Commodity prices surged to the highest level in almost two years after the U.S. government cut its crop-supply forecasts and the dollar slumped on speculation the Federal Reserve will buy more debt to revive the economy.

COMMODITY EXCLUSIVES:

Gold May Jump to $2,000 Amid Currency ‘Battle’: Chart of Day

Gold futures may surge 50 percent to $2,000 an ounce next year as central banks ramp up stimulus programs aimed at propping up the economy, said Peter Schiff, president of Euro Pacific Capital in New York.

Feinberg’s Firm Paid More Than $2.5 Million for Claims (Update2)

Kenneth Feinberg and his law firm have been paid more than $2.5 million in 3 1/2 months to administer the $20 billion fund set up by BP Plc to compensate victims of its oil spill in the Gulf of Mexico.

INDUSTRIAL METALS:

Copper Rises on Bets Fed to Boost Stimulus After U.S. Jobs Data

Copper prices rose to a 27-month high after a larger-than- forecast cut in U.S. jobs spurred speculation that the Federal Reserve will take more steps to bolster the economy, weighing on the dollar.

Alcoa Says Chinese Demand Drives Growth in Aluminum Consumption

Alcoa Inc., the largest U.S. aluminum producer, reported profit that beat analysts’ estimates and said growing Chinese demand will help boost global use by 13 percent this year.

MINING:

Trapped Miners’ Ordeal Nears End in Chile Rescue (Update1)

Chile’s government is making final preparations to rescue 33 miners as the lead drill advances to less than 50 meters (164 feet) from where they are trapped almost half a mile underground.

Hydro Studies Acquisitions in Brazil, Argentina After Vale Deal

Norsk Hydro ASA, Europe’s third-largest aluminum maker, is considering expansion in Brazil and Argentina after it completes the purchase of $4.9 billion of assets from Vale SA.

PRECIOUS METALS:

Gold Futures Advance as Dollar Drops After U.S. Jobs Report

Gold futures rose, rebounding from the biggest drop since July, as the dollar’s slump boosted the appeal of the precious metal as an alternative asset.

AGRICULTURE:

Grain Prices Surge on U.S. Supply Cuts, Boosting Food Costs

Grain and oilseed prices rose the most allowed by the Chicago Board of Trade after the U.S. government said supplies will be smaller than forecast last month, increasing the cost of producing food and fuel.

World Wheat-Inventory Estimate Cut on U.S. Output Drop (Update2)

Global wheat inventories will be smaller than forecast a month ago because of lower U.S. production, the Department of Agriculture said. Grain futures in Chicago surged 9.1 percent.

USDA Cuts Corn Estimate 3.8% as Adverse Weather Trims Yields

The U.S. corn crop will be 3.8 percent smaller than forecast a month ago, the government said, after flooding in June and hot, dry weather in August cut Midwest yields.

Cotton Surges to 15-Year High, Orange Juice Rises on USDA Data

Cotton futures jumped to a 15-year high after the U.S. Department of Agriculture boosted a forecast for global demand. Orange-juice prices also climbed.

Sugar Jumps to Eight-Month High on Demand; Coffee, Cocoa Gain

Sugar jumped to the highest price in almost eight months on concern that demand will outstrip supplies after adverse weather damaged crops in Brazil, the world’s biggest producer. Coffee and cocoa also climbed.

SHIPPING:

Marseille Oil Port Strike Forces Refineries to Halt (Update1)

A 12-day-old workers strike at the French port of Marseille, expected to continue through the weekend, will force refiners in the region to start halting production, leading to motor fuel shortages.

Baltic Dry Index Has Best Week Since August on Iron Ore Ships

The Baltic Dry Index, a measure of commodity-shipping costs, had its biggest weekly gain since August as Chinese demand for iron ore strengthened.

ECONOMIES:

U.S. Economy: Payrolls Decline More Than Forecast (Update2)

The U.S. lost more jobs than forecast in September as local governments fired teachers and other workers in response to declining tax revenue.

Wholesale Inventories in U.S. Rose 0.8% in August (Update1)

Inventories at U.S. wholesalers rose more than forecast in August as companies kept stockpiles in line with demand.

OTHER MARKETS:

Dow Tops 11,000, Treasuries Rise on Fed Easing Bets; Crops Jump

Stocks rallied, sending the Dow Jones Industrial Average above 11,000 for the first time since the May 6 crash, while Treasuries climbed and the dollar slipped as a decrease in U.S. jobs bolstered speculation the Federal Reserve will buy more debt to stimulate the economy. Corn, soybeans and wheat surged on concern that supply is dwindling.

Dollar Falls Below 82 Yen for First Time Since 1995 on Job Cuts

The dollar dropped below 82 yen for the first time in 15 years as the U.S. payrolls report showed employers cut more jobs last month than economists forecast, heightening concern the economic recovery is stalling.

Crude Oil Increases After U.S. Loses More Jobs Than Forecast

Crude oil climbed above $82 a barrel amid speculation the Federal Reserve will buy more debt to stimulate the economy after a government report showed the U.S. lost more jobs than forecast in September.

SPORTS:

Premier League Approves Red Sox’s John Henry to Buy Liverpool

Boston Red Sox owners John W. Henry and Tom Werner have been cleared by the Premier League to complete their 300- million-pound ($478 million) purchase of England’s most successful soccer team, Liverpool.

--Editors: Millie Munshi, Richard Dobson.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

Crop Report 'Shocker' Ripples Through Agriculture Sector

CHICAGO (Dow Jones)-- Government forecasters slashed estimates for the U.S. corn harvest Friday, causing futures prices to surge while igniting shares of many agriculture companies. 

U.S. corn futures soared to a daily trading limit on the Chicago Board of Trade when the market opened, rising 30 cents, or 6%, to $5.82 1/4 a bushel -- near a two-year high. Soybean and wheat futures also hit their exchange-imposed trading limits at the market opening. 

"Shocker may be an understatement," said Jason Britt, president of Central State Commodities, a Kansas City brokerage. "It's very out of character for the USDA to lower the corn yield so much." 

The crop report spilled into equity markets with tractor makers such as Deere & Co. (DE) climbing on the news along with seed and fertilizer companies such as Monsanto Co. (MON). Livestock and poultry producers such as Smithfield Foods Inc. (SFD), meanwhile, traded lower on expectations that higher crop prices would increase feed costs. Longer-dated future contracts for cattle and hogs rose as well. 

The U.S. Department of Agriculture projected a national corn yield of 155.8 bushels an acre, well below last month's projection of 162.5 bushels and lower than analysts' average forecast of 159.9 bushels per acre. 

The USDA was projecting a record crop a couple months ago. But farmers have largely been disappointed as harvest progresses. The crop faced problems from excessive rains early in the season that washed away supplies of nitrogen, a crucial nutrient, and was also stressed by unusually hot night-time temperatures all summer. 

While many traders and analysts could see this year's corn crop yield drifting down to 155 bushels an acre, few expected the USDA to make such an aggressive revision so soon. The U.S. harvest is roughly 50% complete. 

"This is a very tight balance sheet we now have to live with for a long time," said Sal Gilbertie, lead manager of the Teucrium Corn Fund, an exchange-traded fund based on corn futures. 

Other agriculture commodities followed corn higher. Wheat and soybeans surged in part because both, like corn, serve as an animal feed. Livestock futures also climbed because feed is a major cost for producers. 

Stocks for farm machinery manufacturers and other agribusiness companies rose on prospects that higher prices for corn will provide farmers with more money to spend on equipment, fertilizer and seed. Tractor makers Deere, CNH Global (CNH) and Agco Corp. (AGCO) are all higher, along with seed and fertilizer companies Monsanto, CF Industries Holdings Inc. (CF) and Potash Corp. of Saskatchewan (POT). 

Shares for crop processors Archer Daniels Midland Corp. (ADM) and Bunge Ltd. (BG) also moved up as tight supplies of crops provide them with leverage to raise their prices. But meat and poultry producers, including Smithfield Foods, Tyson Foods Inc. (TSN) , Pilgrim's Pride Corp (PPC) and Sanderson Farms Inc. (SAFM), were lower in morning trading. 

Analysts said Friday's report reignites concerns that the market needs higher prices in order to discourage demand and stave off a supply crisis. The report could have other ramifications, since the government has yet to rule on a request to increase the amount of ethanol that can be blended in gasoline to 15% from 10%. 

"This could (heighten) the debate on moving ethanol blends higher, and 'food versus fuel,'" debate, Britt said.

-By Ian Berry, Dow Jones Newswires; 312-341-5778; ian.berry@dowjones.com

Commodities Soar as Crop Forecasts Cut, U.S. May Buy More Debt

(Bloomberg) -- Commodity prices surged to the highest level in almost two years after the U.S. government cut its crop-supply forecasts and the dollar slumped on speculation the Federal Reserve will buy more debt to revive the economy.

 

The Reuters/Jefferies CRB Index of 19 raw materials jumped as much as 2.7 percent to 295.17, the highest level since Oct. 15, 2008. Every price advanced. Wheat, soybeans and corn led the gains, each jumping the most allowed by the Chicago Board of Trade. Copper climbed to a 27-month high, and crude oil topped $83 a barrel.

Since the end of May, the CRB index has rallied 16 percent, and the dollar slid 11 percent against a basket of six major currencies, as the U.S. sought to inject more cash into the economy and spur growth. Today, the greenback dropped below 82 yen for the first time in 15 years as a U.S. payrolls report showed employers cut more jobs last month than economists forecast.

“Everybody is printing more money except emerging markets, and those guys are buying commodities,” said Michael K. Smith, the president of T&K Futures & Options in Port St. Lucie, Florida. “We’re going to have an inflationary spike. This is a perfect storm for commodities going higher.”

The CRB index rose 7.81 to close at 295.11 at 5:10 p.m. New York time. This week, the gauge gained 3.3 percent, the most since April 2.

Crop Forecasts Cut

The U.S. Department of Agriculture today cut its domestic corn-crop estimate for the second time in as many months, predicting a 3.4 percent drop from last year. While farmers will collect the most soybeans ever, the total will be 2.2 percent less than forecast in September, the agency said. Global wheat inventories will be 1.8 percent less than projected last month.

“The government has shocked the grain industry with the huge cut in U.S. production,” said David Smoldt, the vice president of operations for FCStone LLC in West Des Moines. “There will be some scrambling for supplies today.”

Corn futures for December delivery rose the 30 cents, or 6 percent, to close $5.2825 a bushel. Soybean futures for November delivery soared 70 cents, or 6.6 percent, to $11.35 a bushel. Wheat futures for December delivery jumped 60 cents, or 9.1 percent, to $7.1925 a bushel.

Reduced supplies of corn may increase costs for meat companies and squeeze margins for makers of grain-based ethanol such as Valero Energy Corp., Poet LLC and Archer Daniels Midland Co.

The shares of Tyson Foods Inc., the largest chicken processor, slid $1.26, or 7.7 percent, to $15.01 in New York Stock Exchange composite trading. Earlier, they touched $14.82, an eight-month low. Smithfield Foods Inc., the biggest pork producer, fell $1.08, or 6.7 percent, to $14.97, the biggest drop in a year.

Freeport Climbs

Copper futures for December delivery increased 9.5 cents, or 2.6 percent, to close at $3.7745 a pound. Earlier, the price reached $3.8015, the highest level for a most-active contract since July 8, 2008.

Freeport-McMoRan Copper & Gold Inc., the world’s biggest publicly listed copper producer, climbed $4.11, or 4.5 percent, to $95.51. Earlier, the shares reached $95.91, the highest level since Aug. 1, 2008.

Crude-oil futures for November delivery rose 99 cents, or 1.2 percent, to $82.66 a barrel on the New York Mercantile Exchange. Earlier, the price reached $83.13.

Sugar rose to the highest price in almost eight months on concern that demand will outstrip supplies after adverse weather damaged crops in Brazil, the biggest producer.

Cotton futures jumped to a 15-year high after the USDA boosted a forecast for global demand. Textile mills will use 120.8 million bales in the year that began Aug. 1, up 0.2 percent from last month’s estimate, the USDA said.

--With assistance from Jeff Wilson, Whitney McFerron and Leslie Patton in Chicago: Patrick McKiernan, Steve Stroth

To contact the reporter on the story: Yi Tian in New York at Ytian8@bloomberg.net.

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.

Grain Prices Limit Up: USDA Forecast

Grain markets have been on a roller coaster since the summer, when Russia banned exports due to drought conditions. Friday, the United States Department of Agriculture (USDA) cut its projection for this year's corn harvest by 3.8%, as reported in the Wall Street Journal.

 

That news was like pouring gasoline on a fire. The grain markets exploded to the upside, closing limit up. Some exchanges place a limit on how high or low prices can trade on a given day. The limit for corn is 30 cents, for wheat 60 cents and for soybeans 70 cents (each penny equals $50).

What limit up means is that trading is halted. Sell orders can be entered, but its like taking a number in a deli. If someone wants to sell, then maybe you'll get your order off. Usually the opposite happens. The buyers rush in and there are still buy orders waiting at limit up prices.

If you got caught short Friday, you couldn't sell your contract and must wait until Monday. On Monday the market could open limit up again, which means that are losing 60 cents on your corn contract. This recently happened in the pork belly market, where the price was limit up for several days.

The problem of grain shortages is worldwide. China is buying about a quarter of our soybean and cotton crops. Corn reserves are the tightest since the mid 1990s. The carryover for corn (what is left over after this year's buying) will be down a whopping 47%.

Already this year corn futures are up 27.4%, wheat up 32.8%, and soybeans up 9.2%. Food processors are already passing on increases to consumers. These market dynamics will not ease up next year. Look for grain prices to remain high and food prices at the supermarket to keep rising.

Nebraska corn harvest down, but still at more than 1.5 billion bushels

While the U.S. Department of Agriculture reported Friday that Nebraska's corn crop is down 4 percent from last year's record crop, there's plenty of corn to go around, said Kelly Brunkhorst, director of research for the Nebraska Corn Board.

Based on Oct. 1 conditions, the USDA's National Agricultural Statistics Service, Nebraska Field Office, reported Friday that this year's Nebraska corn crop is forecast at 1.51 billion bushels, down 1 percent from last month and 4 percent below last year's record high. Yield is forecast at 170 bushels per acre, nine bushels below last month and eight bushels below the record high set last year.

However, according to the USDA, both 2010 production and yield remain the second highest of record. Acreage for harvest was increased 350,000 acres to 8.9 million, 1 percent above a year ago.

While USDA did lower its yield estimate for Nebraska - down from its 179 bushels per acre estimate in September, Brunkhorst said reports from fields "make it clear that 179 bushels was perhaps too optimistic for the state this year."

"While we had pretty good weather overall in Nebraska, a couple of weeks of hot weather right after pollination may have taken the top off yields a bit," he said. "Yet 170 bushels per acre is pretty darn good, obviously, when you consider it's the second-highest ever."

Nationally, USDA estimated yields at 155.8 bushels per acre, below last year's record of 164.7. If realized, that would put the U.S. corn crop at 12.7 billion bushels. As forecasted, both those figures would be the third-largest on record, Brunkhorst said.

"While the yield reduction appears to tighten the corn market a bit, we're confident about the current supply picture," Brunkhorst said. "At the same time, we'll have good supplies of other corn products, including some 4.2 million tons of distiller grains being produced by Nebraska ethanol plants this year alone."

Friday's crop report also pushed agricultural commodities futures up, including corn, soybeans and ethanol.

John Anderson, an economist with the American Farm Bureau Federation, said the big drop in both the corn yield and production estimates in October's crop report caught the industry by surprise. "Folks were expecting to see a drop in average yields from last month's report because of poor late-season weather conditions across much of the Corn Belt, but nobody was forecasting this big of a drop in the corn crop," Anderson said.

Anderson said the smaller-than-expected corn crop and the lowest stock situation since 1995 prompted USDA to forecast a market year average cash price of around $5 per bushel - up 60 cents from last month's price forecast.

"Corn producers will welcome the higher price, but livestock and dairy producers will have to pay more than they expected to for feed," Anderson said.

Friday's report said that state soybean production is forecast at a record high 281 million bushels, 5 percent below last month but still 8 percent above the previous record set last year.

State soybean yield is forecast at a record high 55 bushels per acre, unchanged from last month and 0.5 bushel above the previous high set in 2009. Area for harvest was decreased 250,000 acres to a record high 5.1 million, up 7 percent from 2009.

Nationwide, USDA said soybean production is forecast at a record high 3.41 billion bushels, down 2 percent from September but 1 percent above last year. Based on September 1 conditions, USDA reported that yields are expected to average a record high 44.4 bushels per acre, down 0.3 bushel from last month but up 0.4 bushel from last year.

Area for harvest in the United States is forecast at 76.8 million acres, down 1 percent from the previous estimate but up 1 percent from 2009, according to the USDA.

Statewide, the USDA also reported:

-- Sorghum production is forecast at 7.05 million bushels, up 15 percent from last month due to an increase in harvested acres. This production is still 46 percent below a year ago and the smallest since 1953. Yield at 94 bushels per acre is unchanged from the previous month but up 1 bushel from last year. Harvested acreage was increased 10,000 acres to 75,000 but down 46 percent from previous year and smallest since 1947.

-- Sunflower production is up 43 percent due to increased acreage and yield from a year ago.

-- Dry edible bean production is up 37 percent from last year due to more acres.

-- Sugarbeet production is down 19 percent from 2009, a result of fewer acres for harvest and a lower yield.

-- Alfalfa hay production is forecast to be 4 percent higher and all other hay production is unchanged compared to a year ago.

robert.pore@theindependent.com 

Published: Saturday, October 9, 2010 12:03 AM CDT