U.S. soybeans rose 1 percent on Friday, and posted the biggest weekly gain in a month, ahead of final crop estimates from the Pro Farmer tour of the Midwest this week that were released at the close of Friday's futures trading.
Following its week-long tour of the U.S. Midwest crop belt, Pro Farmer pegged 2012 U.S. corn production at 10.478 billion bushels, below the U.S. Department of Agriculture's (USDA) current estimate for 10.779 billion bushels and soybean production at 2.6 billion bushels, below the USDA's outlook for 2.692 billion.
Chris Manns, president of Chicago Traders Group Inc. said the corn number wasn't surprising but "the soybean number is low, a bullish soybean number."
USDA will update its production numbers on Sept. 12. Soybeans were solidly in the driver's seat, edging closer to the all-time high of $17.77-3/4 set by the spot contract on July 20 as the worst drought in 56 years devastated the crop, and export demand is staying strong despite the high prices. November soybeans were up 16-1/2 cents per bushel at $17.31-1/2 and rose 5 percent for the week.
Corn futures at the Chicago Board of Trade turned down on profit-taking and a slide in wheat. Wheat held firm early in the trading session on dryness in Australia's wheat region and downgrades to the Russian crop.
However, rainfall in portions of the drought-stricken U.S. winter wheat region and forecasts for more rain over the weekend combined to drive wheat futures lower by the close of trade on Friday.
December corn was down 6-1/4 cents at $8.08-1/2 per bushel, ending the week nearly flat and September wheat was down 7 cents at $8.67-1/2 per bushel, ending the week down nearly 1 percent.
"The Pro Farmer tour numbers have been kicking around and when you start putting percentages to them (estimates so far) it's tough to be optimistic," said Tim Emslie, director of research at Country Hedging. On Thursday evening, the tour projected corn yield in Iowa -- the top corn and soybean producing state -- at 137.3 bushels per acre, down from the USDA's estimate of 141 bushels and well below the tour's three-year average of 171.7 bushels.
It pegged the state's average soybean pod count at 999.8 pods in a three-foot square, down 20 percent from the tour's three-year average of 1,255.5 pods.
Traders said soybean prices need to head even higher to ration demand to ensure U.S. supplies do not run out by the end of the new-crop marketing year on Aug. 31, 2013 -- when the stocks-to-use ratio is projected to be the lowest in 48 years.
Traders also were nervous about the approach of Tropical Storm Isaac to U.S. shores by the weekend. Farmers were hoping for rainfall from the storm to boost soil moisture depleted by drought. Yet there was caution that heavy rainfall in the south and east may harm mature corn and soybeans soon to be harvested.