Good news for HIPC which will lower costs of production:
Bumper U.S. crops bigger still, shrug off blizzard
(Adds closing prices, graf 5) By Charles Abbott
WASHINGTON (Reuters) - The nation's farmers will reap a record 2.74
billion bushels of soybeans and the third biggest corn crop
ever despite abnormally early snows that endangered the crops, the
Agriculture Department said Monday.
With the autumn harvest in its last stages, the department estimated
the corn crop at 9.36 billion bushels and cotton at 18.85
million bales, the fourth largest on record. It said a pre-Halloween
blizzard in the Plains and western Corn Belt did little damage
because most of the crop was already in the bin.
The large crops would allow high exports in the coming year,
including record soybean exports of 980 million bushels, while
meeting strong domestic demand for food. Minimal food price
increases of about 2.5 percent were forecast for 1998.
Corn and soybean crop estimates rose slightly from a month ago but
cotton rose a sharp 2.4 percent, or 438,000 bales, each
weighing 480 pounds.
''No one was looking for numbers this high,'' said cotton analyst
Sharon Johnson of Frank Schneider & Co.
Futures prices fell sharply at the Chicago Board of Trade after the
larger-than-expected forecasts. Soybeans for January delivery
fell 18 cents to $7.21-1/2 a bushel, December corn fell 8-1/4 cents
to $2.75-3/4 a bushel, December wheat lost 8 cents to $3.50 a
bushel, the lowest price since summer due to the forecast for record
world wheat output.
Analysts fretted over a shrinking U.S. soybean stockpile -- forecast
to dip to 255 million bushels by next fall -- and disputed
whether the corn stockpile next fall would be as large as forecast
-- 928 million bushels, up 147 million bushels from October's
estimate mostly due to lower exports.
''I'm not sure the whole supply and demand story hangs together
here,'' said Mike Helmar, senior economist at WEFA Group.
That large a stockpile would bring lower prices, he said, making
corn an attractive buy.
Private consultant John Schnittker said ''the biggest surprise'' was
the reduction in forecast U.S. corn exports by 100 million
bushels, to 1.925 billion bushels.
There also was skepticism over the department's forecast that China,
a U.S. competitor, would export 4 million metric tons of
corn this marketing year, 1.5 million tons more than estimated a
month ago. China would have to reduce its reserves to the
lowest level since 1989 to reach that export volume, Helmar said.
''I believe later on in the year we'll see net imports by China
unless the numbers don't mean anything,'' said Dick Smetana,
director of research at AgResource Co.
Assistant Agriculture Secretary Mike Dunn warned last week that the
quality of up to 1.5 billion bushels of corn and sorghum
could decline sharply unless rail-car shortages were remedied in the
southern Plains and western Corn Belt.
In forecasting crops around the world, the department pegged the
Australian wheat crop at 17.5 million metric tons, up 500,000
tons from last month, despite fears of a damaging El Nino weather
pattern, and repeated a projection of 33.3 million tons of rice in
Indonesia.
The U.S. agricultural attache in Jakarta says output will be at
least 1 million tons lower than that because of an El Nino-caused
drought.
^REUTERS@ Reut17:49 11-10-97
(10 Nov 1997 17:42 EST) |
