Survey-based USDA crop prod report

[melvill]

USDA released its first survey-based soybean and corn production report today.

USDA corn yield at 152.8 compared to 150.3 (not survey based) in July.

Soybean yield at 41.5 same as 41.5 (not survey-based) in July.

Market was expecting lowered yields, especially for soybeans so prices off about 11 cents this morning. Remember, though, that U.S. soybeans are only about one-third of the way through the critical August pod-filling period when moisture, or lack or it, are very important. Corn is also still in reasonably early in it's yield cycle but further along than beans.

US all-wheat production at 2.114 bil.bu. compared to 2.130 average trade estimate and USDA 2.138 last month. Wheat down a little this morning, probably related to selling pressure in the corn and bean pits.

[charliep]

Just a note to highlight the impact of the declines in other markets (read stock/financial) on agricultural markets. Is adding in volatility as some are forced out of positions to meet margin calls in other markets.

[melvill]

Just to add to Charlie's comments, the sub-prime mortgage lending markets, and hedge funds that seem to go hand-in-hand, seem to be in trouble with large defaults in the U.S. Those same hedge funds are apparently receiving huge margin calls so they sell holdings in everything, including commodities, to meet those calls.

Central banks been kicking in huge dollars to the banking industry to try to head off a credit crisis, real or perceived.

More info at
http://money.cnn.com/2007/08/10/real_estate/mortgage_meltdown_crushing_other_markets/index.htm?postversion=2007081012
http://www.cbc.ca/cp/business/070810/b081061A.html

http://ctv2.theglobeandmail.com/servlet/story/RTGAM.20070810.wrvox10/business/Business/businessBN/ctv-business

[cottonpicken]

Its very real melvill.

There is a very real chance that if the global derivative market falls like a house of cards(currently 10 times world gdp) its lights out for everyone.

Warren buffet didnt call them financial instruments of mass destruction for nothing.

I've been studying them for two years and still dont have a clue!