The first four lines of the USDA crop report are:
- Corn Production Up 5 Percent from 2008
- Soybean Production Up 8 Percent from Last Year
- Cotton Production Up 3 Percent from 2008
- All Wheat Production Up 3 Percent from July Forecast
Corn production could be the second largest in history, behind 2007. Acreage is at 80 million acres and bushels per acre are at 159.5, up 5.6 from last year. This increase is due to the favorable weather conditions this year.
Soybean production is forecast to be a record high of 3.2 billion bushels, up 8% from last year. If realized this will be the fourth largest harvest in history.
So you would expect this bearish news to produce a downside to the soybean oil market. However, today it edged higher because there is still demand at these higher prices driven by the weak monsoon season and higher energy prices.