Grains trade mixed after USDA’s crop report

By MADLEN READ, AP Business Writer
Tuesday, August 12, 2008 1:06 PM CDT

NEW YORK 8/12/08 - Corn and wheat prices dipped on Tuesday after the U.S. Department of Agriculture lifted its production estimates for those grains.

Soybean prices, however, edged higher. The USDA reported that this year’s soybean crop would be slightly smaller than it previously predicted.

The figures were largely in line with agriculture analysts’ expectations, but surprisingly positive given the storms that devastated Midwest farmland earlier this year, said Elaine Kub of commodities research firm DTN in Omaha, Neb.

“In ideal years, farmers will harvest 90 percent and lose 10 percent to the usual factors. And nonetheless, the USDA says they will harvest more than 91 percent. So that’s perplexing,” she said. Kub said the predictions could have a “wide margin of error.”

The USDA estimated farmers should harvest 12.3 billion bushels of corn, still down 6 percent from last year’s crop, but better than previously believed thanks to the improvement in the weather. It estimated that the soybean crop will be 2.97 billion bushels, and the wheat crop will be 2.462 billion bushels.

If those forecasts are correct, this year’s corn crop will be the second-largest ever, and the soybean crop will be the fourth largest.

After taking a tumble last week, wheat for September delivery fell 6.75 cents to $7.87 a bushel in early trading on the Chicago Board of Trade, and corn for December delivery fell 11 cents to $5.06 a bushel. November soybeans rose 9 cents to $12.05 a bushel.

Other commodities, which also sold off last week, were mixed.

Light, sweet crude for September delivery rose 33 cents to $114.78 a barrel on the New York Mercantile Exchange, after closing on Monday at its lowest point since May 1.

Heating oil futures rose 1.3 cents to $3.1325 a gallon, while gasoline futures fell 0.72 cent to $2.8594 a gallon.

Also on the Nymex, gold for December delivery fell $5.70 to $822.60 an ounce on the Nymex. Silver for September delivery rose 6 cents to $14.680 an ounce on the Nymex. September copper fell 1.3 cents to $3.2785 a pound.

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