U.S. soybean markets retreated from their flood-induced June highs as better weather calmed worries of lower production prospects. In its Oil Crops Outlook report issued July 14, the USDA projected the 2008 soybean crop at 3 billion bushels, a decrease from its previous projections but still higher than in 2007. U.S. farmers had originally indicated intentions to plant 74.8 million acres of soybeans, but it was estimated that 74.5 million were actually sown. Updated USDA survey data following the Midwestern floods in June dropped that estimate even further to 72.1 million acres to be harvested. Despite these decreases, the projections are still better than last year's. In 2007, 63.6 million acres were planted and 62.8 million acres harvested. 
 
 Given a higher probability for shortened crop development due to delayed seeding, the USDA trimmed its 2008 soybean yield projection to 41.6 bushels per acre from a trend line of 42.1 bushels. The combined reductions for harvested acreage and yields cut the projected 2008 soybean output by 105 million bushels from the previous month's estimate of 3.1 billion bushels. A record 3.2 billion bushels were produced in 2006.
 
 With one eye on the USDA reports, market traders were watching the soybean crop closely. "Corn caught up to normal progress more rapidly than soybeans," noted Darrel Good, an extension economist at the University of Illinois. In late July, liquidation in all commodity markets brought the price of oil, corn and soybeans down from record highs. Good said the 12-month uptrend in the market, which started in the summer of 2007, was highly unusual. "I think we're going to have to get back to a more plentiful supply situation for the prices to come down," he added. 

 
 In its outlook report, the USDA raised its projected 2008-'09 U.S. average farm price for soybeans up by $1 to a range of $12 to $13.50 per bushel. At the same time, it lowered its projections for soybean exports and domestic crushing, citing weakened demand due to the high prices.
 
 In Canada, the canola acreage sown in 2008 set another record high at 15.5 million acres with an expected average yield of 1,300 pounds per acre. The USDA projected exports of canola from Canada to slip a bit, which should boost ending stocks this year. In the United States, planted canola acreage declined 15 percent to slightly more than 1 million acres. Most of the U.S. reduction was in North Dakota, where producers were taking advantage of record prices for spring wheat, durum and soybeans.

Ideal weather in August will be required for U.S. soybeans to catch up after late planting. The USDA was forecasting 3 billion bushels for the 2008 crop.

U.S. soybean, Canadian canola acres rise in 2008

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U.S. soybean, Canadian canola acres rise in 2008