In support of your bloomberg article, I sourced the following from Agrimoney:
"Traders 'race' to cut US corn yield estimates 12:47 UK, 26th August 2011, by Agrimoney.com
A "race" among traders to cut estimates for US corn yields is prompting talk of the worst result for nine years, on the eve of the results of a crop tour expected to throw extra light on the harvest potential.
"Yield forecasts are now a race to the bottom," US Commodities said, adding that the market appeared to have factored in an estimate of 148-149 bushels per acre.
"It is true the blowtorch heat [largely in July] did major damage across the Corn Belt," the broker said.
However, many other analysts believe that even bigger cuts from the official estimate, of 153.0 bushels per acre, are being talked about, after the ProFarmer tour of Midwest crops pegged the yield in Illinois, at 156 bushels per acre.
Illinois, America's second-ranked corn producing state, last year achieved a yield of 165.7 bushels per acre.
'The fear is...'
While the ProFarmer number for Illinois was "solid", it "is not enough to cover the expected losses in Indiana, Ohio, Missouri, Texas, Arkansas, Tennessee and Kansas", Matthew Pierce at PitGuru said.
"The fear is we are sitting on a national yield of 146-148 bushels per acre."
At Country Futures, Darrell Holaday said the market was "definitely below 150" bushels per acre, adding that "there is now discussion of a 140 yield", which would be the lowest since 2002.
Such downbeat talk "is normal as yield ideas deteriorate", he added, with "small crops get smaller" one of Chicago's favourite adages.
Tour results
A yield of 140 bushels per acre implies a crop of less than 12bn bushels, factoring in US Department of Agriculture area numbers, well below levels being proposed by major banks and industry groups.
The International Grains Council on Thursday pegged the US crop at 325m tonnes (12.8m bushels), some 3m tonnes (110m bushels) below the USDA's latest estimate but still implying a yield above 150 bushels per acre.
ProFarmer crop judges are expected later on Friday, potentially just after the close of Chicago's grain futures market, to unveil final tour findings, after tours of the eastern and western Midwest united in Austin, Minnesota last night.
"In an attempt to piece the daily pieces of the puzzle together from their tour, it would appear that the number should come in lower than the USDA estimate of 153 bushels per acre," Jon Michalscheck at Benson Quinn Commodities.
Corn vs wheat
Separately, the Canadian Wheat Board overnight issued a reminder of the importance of the US corn crop in deciding wheat prices.
The board, the biggest wheat marketer, estimated the world wheat crop at 670m tonnes, "driving home the fact that there is no real shortage of wheat this year."
However, if the US corn yield "follows the industry's lower expectations and production is less than 13bn bushels, corn prices will provide a floor for wheat prices by encouraging wheat feeding and, in the next production cycle, swap further acres from wheat to the more-profitable corn", the CWB said."
"Pro Farmer 2011 Corn, Soybean Crop Estimates August 26, 2011 By: Pro Farmer, Editor Pro Farmer pegs 2011 U.S. corn crop at 12.484 billion bushels; average yield 147.9 bu. per acre +/- 1% = 146.45 bu. to 149.4 bu. per acre; 12.36 billion to 12.61 billion bushels.
Pro Farmer pegs 2011 U.S. soybean crop at 3.083 billion bushels; average yield of 41.8 bu. per acre +/- 2% = 40.96 bu. to 42.64 bu. per acre; 3.02 billion to 3.14 billion bushels.
NOTE: Pro Farmer editors believe USDA will eventually lower harvested acres for both corn and soybeans, but USDA?s Aug. 1 harvested acreages were used in making these estimates. The slight uptick in the bean yield estimate from USDA?s Aug. 1 yield is the result of one of the most disease-free bean crops we?ve ever seen on the Tour.
CORN Ohio: 160 bu. per acre. The corn crop in Ohio is variable and immature, with many Tour samples still in the milk stage. The immaturity of the Ohio corn crop means it has greater potential to add bushels with late-season rains and an extended growing season.
Indiana: 146.7 bu. per acre. Corn in the Hoosier State shows the impact of stressful conditions throughout the growing season. After a severely delayed start, conditions turned hot and dry. Early denting and poor plant health are clear signs this crop has been pushed too hard. Test weights will be light.
Illinois: 154.8 bu. per acre. Parts of the state show promise, but there?s too much stress and poor plant health to produce a "typical" Illinois crop. The challenge will be to preserve yield potential and get it to the bin.
Iowa: 164 bu. per acre. Southwest Iowa is a disaster. Crop Districts 1 and 4 will be better than last year, but not good enough to make up for bushels lost in the southwest corner. Eastern and central Iowa have solid yield potential, but the Tour failed to find many big yields.
Minnesota: 169 bu. per acre. It?s too dry in Minnesota. The stress has been around too long and the corn crop is looking at a 2010-like finish. The crop had great potential but missed too many rains after pollination.
Nebraska: 165 bu. per acre. Good ear length and solid weight don?t make up for missing ears. That was the problem in Nebraska, with ear counts down 2% from year ago.
South Dakota: 140.5 bu. per acre. This crop looks really similar to last year?s.
SOYBEANS Ohio: 45 bu. per acre. Pod counts are up from a year ago, but they are flat. The crop needs time and water to finish strong, but has potential for solid yields.
Indiana: 44 bu. per acre. Disease and bug pressure were limited. That suggests the Indiana bean crop could add bushels if there are timely late-season rains.
Illinois: 49 bu. per acre. Rains rolled through parts of Illinois during the Tour. The northern half of the crop has plenty of moisture to finish with a good yield.
Iowa: 53 bu. per acre. Last year?s SDS was replaced with fields of green beans and plenty of plant health. Give this Iowa crop one more rain, and we?ll see a record yield for the state in 2011.
Minnesota: 39 bu. per acre. Good plant health cannot overcome soils that are just too dry. This crop has been under stress since pod-set. A rain now probably wouldn?t recover 100% of lost yield potential.
Nebraska: 52.5 bu. per acre. Disease-free soybeans with no bugs in Nebraska and a crop that can be irrigated at just the right time makes it really hard to be pessimistic about the Husker bean crop. Nebraska?s beans aren?t without problems, but there are far fewer problems than excellent beans.
South Dakota: 39 bu. per acre. We think USDA got too pessimistic with its Aug. 1 estimate of the South Dakota bean crop. It does need one more rain to finish well. Across the Corn Belt, a lack of disease means the bean crop has a chance at a really good finish."
So instead of the USDA's earlier Aug estimate of 12.9b bu (or 153bu/acre), it has been reduced thru Pro Farmers crop tour to 12.48b bu (or 147.9bu/acre). This has pushed corn futures to $7.67/bu. CBOT wheat futures climbed to $7.97/bu, while soybeans lifted to $14.24/bu as published on bloomberg: http://www.bloomberg.com/markets/commodities/futures/
As grain prices stay high & push even higher, fert demand & prices will also strengthen as a result of strong farm economics. This is brilliant news with great timing for MAK as we draw closer to formalising the JV with NMDC, conducting the feasibility for Wonarah for the full-blown plans with NMDC & complete the feasibility at Namibia.
Everything is lining up for us. Even the US seems to have broken its losing streak of late & if we see a QE3 happen commod prices will further strengthen, though I'm certainly not making any predictions in relation to the US economy or markets or QE3. Bernanke didn't give too much away in Jackson Hole last night: http://finance.yahoo.com/news/Bernankes-speech-sends-stocks-apf-3974365189.html?x=0&sec=topStories&pos=5&asset=&ccode=
I'm all set ready for MAK's long-awaited time in the sunshine.
GL to all Cheers
AEV Price at posting:
36.5¢ Sentiment: LT Buy Disclosure: Held
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