DJ US CROP REPORT SURVEY: USDA To Trim Corn, Wheat Inventories 08.11.2011
--Federal forecasters expected to trim estimates for corn, wheat inventories
--Soybean inventories seen climbing on sluggish export demand
--USDA seen making slight trim in forecast size of U.S. corn harvest
CHICAGO (Dow Jones)--Federal forecasters are expected to trim their estimate for U.S. corn and wheat inventories this week due to a smaller-than-expected harvest.
Soybean supplies, however, are likely to grow as export demand remains sluggish.
The U.S. Department of Agriculture is scheduled to release its latest forecast for production, inventories and demand on Wednesday at 8:30 a.m. EST (1330 GMT).
The USDA in its monthly crop report will forecast the corn harvest at 12.402 billion bushels, down 0.2% from its October estimate, according to 22 analysts surveyed by Dow Jones Newswires.
A smaller U.S. crop and strong domestic demand is expected to trim the USDA's end-of-year supply projections as well. Solid processing margins for ethanol producers and continued demand from the livestock industry are strong draws on U.S. corn supplies, offsetting slower-than-expected export demand, said Don Roose, president Iowa based brokerage U.S. Commodities.
The USDA is expected to lower its estimate for corn inventories as of Aug. 31, 2012, when the crop year ends, to 801 million bushels, down 7.5% from the USDA's October estimate.
The agency, however, is expected to raise its supply estimate for soybeans on sluggish export demand. A slower-than-expected start to the U.S. export season, and the potential for a larger South American crop, could make it tough to reach the USDA's current export projections for soybeans, said Steve Freed, analyst with ADM Investor Services.
The USDA's production estimate for the domestic soybean crop is expected to be near the October estimate. Forecasters are expected to peg the soy harvest at 3.059 billion bushels, steady with its October estimate of 3.060 billion, according to 22 analysts surveyed by Dow Jones Newswires.
The USDA also is expected to raise its estimate for soy inventories as of Aug. 31, 2012, when the crop year ends. Analysts on average predict supplies at 185 million bushels, up 15.6% from the USDA's October estimate.
As for wheat, government forecasters are expected to trim their estimate for U.S. wheat inventories due to a smaller-than-expected harvest.
The USDA in its monthly crop report will forecast wheat supplies at 819 million bushels at the end of May 2012, down 2.2% from its October estimate, according to the average estimate of 17 analysts surveyed by Dow Jones Newswires.
Due to delays in this year's harvest, the USDA re-surveyed spring wheat growers in several states for the November report, potentially driving a cut in the number of acres harvested.
Most analysts look for smaller wheat production, but the key question is how aggressively the USDA will cut their export forecast, said Rich Nelson, analyst with Allendale Inc.
Strong export competition from the Black Sea region sets the stage for a cut in total U.S. demand, which includes foreign sales