From Agrimoney.
Commentators from Goldman Sachs to the University of Illinois lined up to cast doubt on long-awaited forecasts in a benchmark US report, fuelling a reversal in soybeans' gains of the last session.
However, the extent of the supply shifts has attracted increasing scepticism, notably over a yield forecast which the USDA has, controversially, based on data excluding last year's disappointing 147.2-bushels-per-acre figure.
"It is not clear why 2011 was not included in the trend analysis of yields," Darrel Good, agricultural economist at the University of Illinois, said, terming the USDA's forecast "very aggressive".
'Pretty darn optimistic'
Rabobank, flagging "significant uncertainty around yield expectations", said that the last, and only, time a comparable yield was achieved was three years ago when "harvested acreage was 11% lower, with less corn-on corn acreage planted".
The expansion of US corn sowings a 75-year high, as measured by farmers' initial intentions, has extended plantings into less productive areas of the US, and involved successive corn sowings which are usually significantly less productive than when the grain is rotated with other crops.
At Teucrium Trading, a specialist in commodity-based exchange traded funds, Sal Gilbertie said he was hearing from farmers who were planting "corn on corn on corn" – three successive crops on the same fields.
"The USDA's yield number is pretty darn optimistic," Mr Gilbertie told Agrimoney.com.
Goldman Sachs, also flagging the USDA's exclusion of 2011 yield data, said it was sticking with an estimate of 160 bushels an acre, and by forecasts of Chicago's near-term corn contract standing at $6.80 a bushel in three months' time – significantly above values implied by the current futures curve.
While acknowledging that the data "will likely weigh on corn prices in the near term, we believe that further downside to prices from current levels will be limited until we get a better idea of summer growing conditions", Goldman said.
This outlook was echoed by Australia & New Zealand Bank analyst Paul Deane who, saying the USDA had "set the bar high on expectations for US corn yields", cautioned that such a result would require "benign July temperatures in the Midwest and adequate soil moistures into August".
As such, "grain prices will likely remain supported for the next four months", until such a benign outcome is ensured.
Click Below for more.