Trading Pace Remains Steady

CHICAGO - Aug 2/06 - SNS -- The pace of trade on international agriculture commodity markets was mostly steady with buyers in the Middle East stepping into feed barley and wheat markets.

The demand outlook for the coming season is helped by crop production problems in India, where government officials now say they may need to buy another 1 million metric tons (MT) of wheat in addition to planned purchases of 3.9 million MT through March of 2007.

Strong demand is also a feature of the corn outlook, with the industry looking for major increases in the quantity used to produce ethanol. This has markets watching weather developments in the U.S. corn belt closely because of the necessity of strong yields.

The last USDA yield forecast was for a 149 bushel crop. This is seen as the minimum yield needed to prevent stocks from falling to approach pipeline requirements. However, traders are thinking the August 11 crop report will show yields improving into the 150 to 155 range.

Interestingly, the Linn Group crop tour is coming back with an average yield of 150.08 bushels per acre for corn, which points to a prospective 10,819.5 million bushels crop as of July 31, down from 10,894 million the previous week.

Subscribers can read the full text of the article by Clicking here