Milling & Baking News - July 29, 2008 - 21

News Feature

million bus as the initial forecast
issued in May. At 2,461 million bus,
the 2008 U.S. wheat crop would
be 394 million bus, or 19%, larger
than the 2007 outturn of 2,067 million bus and would be up 649 million bus, or 36%, from 1,812 million bus in 2006. This year 's crop
would be the largest harvested in
the United States since 2,547 million
bus in 1998. The recent five-year
average U.S. wheat outturn was
2,097 million bus.
U.S. winter wheat production
was projected at 1,864 million
bus, up 348 million bus, or 23%,
from 1,516 million bus in 2007. If
the projection is realized, the winter wheat crop would be the largest since 1998. Production of U.S.
spring wheat other than durum
was projected at 507 million bus,
up 28 million bus, or 6%, from 479

Hard red winter wheat 12% protein, basis Kansas City
per bu
$15

$10

$5
April
2007

June

Aug.

Oct.

million bus in 2007. It would be
the largest other-spring wheat crop
since 569 million bus in 2004.
The U.S.D.A. projected world

Dec.

Feb.
2008

April

June

wheat production in 2008-09 at a
record 664.24 million tonnes, up
from 662.9 million bus as the June
forecast and up from 656.01 million

Corn, soybean crop prospects improve with weather
Since "bottoming out" in mid-June, corn and soybean crop conditions
have improved steadily, while corn prices have tumbled more than 25%
since setting record highs in late June.
March through July 2009 corn futures prices were over $8 a bu ahead
of the June 30 U.S. Department of Agriculture Acreage report. Soybean
futures moved above $16 a bu following the report.
Since then spot through June 2009 corn futures prices in Chicago
have plummeted more than 25%; the December 2008 contract on July
22 closed below $6 a bu for the first time since April 1. Most soybean
futures contracts have dropped more than $2 a bu, or as much as 15%,
since the first week of July with nearby months under $14 a bu for the
first time since the first week of June.
Outside influences, such as retreating crude oil prices and commodity
fund selling, have been cited as helping drive prices lower, while improved weather has been the major fundamental influence pressuring
prices.
Corn prices shot higher in June as flood waters inundated Midwest
fields, especially eastern Iowa, southeast Wisconsin and parts of Illinois
and Missouri. U.S.D.A. crop condition ratings for the 18 major producing
states bottomed at 57% good to excellent as of June 15, compared with
70% around the same date a year earlier. But since then corn crop conditions have improved, with the good to excellent rating at 65% as of July
20, even moving ahead of last year's rating of 62% at the same time.
The corn crop remains about two weeks behind "normal" because
of a prolonged cool, wet spring, late planting and replanting. That has
raised industry concerns about heat stress during the key pollination
period and about a potential early frost on late maturing crops.
But David Salmon, meteorologist and owner of Weather Derivatives,
a Kansas City-based agricultural and energy consulting service, expects
the Midwest corn crop will face neither extreme summer heat nor an
early frost.
"Precipitation has become spotty but temperatures will remain reasonable with a day or two hot, but then it will cool back down," Mr.
Salmon said. He expects no prolonged heat spell that would harm crops
in the Midwest. "Weather is not all that great, but the crop will be carried through with plenty of soil moisture."

22 / July 29, 2008

Milling & Baking News

Mr. Salmon forecast corn yields will average near last year's 151.1
bus an acre based on current ratings and his expectation of weather
conditions through the growing season.
Corn pollination in the Midwest, which usually peaks in the last two
weeks of July, is widely variable this year and likely will peak the first
week of August, when it typically is hotter and drier. But because of
adequate soil moisture and "reasonable" summer temperatures, Mr.
Salmon does not foresee a problem with the late pollination.
Good soil moisture also should help to alleviate early frost concerns.
"Dryness tends to predispose an early frost," he said. While better
moisture conditions don't necessarily predispose a late frost, he said,
they tend to remove the predisposition for an early frost.
Soybeans in the Midwest are following a similar path as corn with
peak blooming and pod setting periods delayed about two weeks from
average. Mr. Salmon expects soybean bloom in the Midwest to peak the
first week of August.
Good to excellent ratings for soybeans in the 18 major states sank to
56% as of June 15 and have edged upward to 61% as of July 20, equal
to the year-ago rating at the same time, the U.S.D.A. said.
Yield prospects also have improved during that time. Mr. Salmon
forecast soybean yields to average 42.7 bus an acre based on July 20
conditions, with that number likely to hold until harvest. The U.S.D.A.
said soybeans averaged 41.2 bus an acre nationally in 2007.
Mr. Salmon noted that conditions in the Southeast have become
extremely dry and yields there likely were suffering, although not as
severely as last year.
He also said dryness in the northern plains "was not great for row
crops" but that spring wheat could benefit with higher protein levels.
Trendline projections in the U.S.D.A. July 11 supply/demand report
put 2008 U.S. corn production at 11,715 million bus with an average
yield of 148.4 bus an acre and soybean production at 3,000 million bus
with an average yield of 41.6 bus.
The first survey-based soybean and corn crop production and
yield forecasts of the 2008 season will be released by the U.S.D.A.
on Aug. 12. MBN
- Ron Sterk

bakingbusiness.com / world-grain.com

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - July 29, 2008

Table of Contents for the Digital Edition of Milling & Baking News - July 29, 2008