Much of the recent attention in commodity markets, at least
in the popular press, has focused on the U.S. corn crop and the potential impact
of drought conditions on production and prices. The focus has been warranted
since corn is the largest U.S. crop; corn is used in a wide variety of food,
feed, and industrial products; and corn yields are most susceptible to drought
conditions.
As the growing season progresses and adverse weather
conditions persist over large areas, more attention is being focused on the U.S.
soybean crop. The importance of the size of the U.S. crop is magnified by the
small South American harvest earlier this year. The USDA estimates that crop at
4.2 billion bushels, 16 percent smaller than the record crop of 2011. The USDA
expects South America to maintain a large export presence, however, by sharply
reducing inventories over the next year. Even so, the pace of exports of U.S.
soybeans remains stronger than normal for this time of year. The USDA now
projects 2011-12 marketing year exports at 1.34 billion bushels, 65 million more
than projected in March. With only six weeks left in the marketing year, exports
need to total 81 million bushels, 13.2 million per week, to reach the USDA
projection. Export inspections for the four weeks ended July 17 averaged 16.1
million. As of July 12, the USDA reported unshipped export sales for the current
year at 171.5 million bushels. It appears that exports may marginally exceed the
USDA projection. <Read More>
