We mentioned earlier that surging rail car volumes for grains pointed to clear evidence that the agriculture boom was the result of actual DEMAND, rather than quantitative easing, but obviously people have a hard time accepting any explanation that would seem to absolve Bernanke.
A new report from the USDA (.pdf) furthers our view. Check out what they say about soybeans:
Total U.S. oilseed production is projected at 101.8 million tons, down 1 million from last month as lower soybean and cottonseed production are only partly offset by higher peanut production. Soybean production is forecast at 3.375 billion bushels, down 33 million from last month. The soybean yield is projected at 43.9 bushels per acre, down 0.5 bushels from the previous estimate. Soybean exports are raised 50 million bushels to a record 1.57 billion due to increased global import demand and to a record sales pace, especially to China which accounts for over 70 per cent of known U.S. soybean export sales through October. Soybean ending stocks are projected at 185 million bushels, down 80 million from last month.
Record sales to China and declining yield. Got that? (via Bloomberg)
And yes, soybean prices have gone nuts.