At least one grain market analysts Wednesday said the latest supply and demand report for old crop corn and soybeans held surprises that would be bearish on both futures markets.

Darin Newsom, DTN senior analyst, said an estimated increase in the 2012 ending corn stocks was a surprise and said he was doubtful that the estimate will hold up during the next 15 months.

The USDA estimated a drop in current market year demand in imports by 50 million bushels adding to the 2012 carry over of 900 million bushels, a 6.7 percent carryover.

However, Newsom said with the current weather challenges thus far in the 2011 growing season – late corn planting in the northern tier of Corn Belt states, plus the intentional flooding of 200 square miles of Missouri farm land, he is doubtful the 2012 ending stocks will tally 900 million bushels.

He said it’s possible that the actual figure could end around 550 to 600 million bushels, or about 5 percent of the overall supply.

Nevertheless, the market was trading Wednesday’s numbers and although corn opened slightly higher, it didn’t take long to see July futures drop by nearly 30 cents by noon.

The USDA estimates 2012 corn production at 92.2 million acres, harvesting 85.1 million with a national average yield of 158.7 bushels per acre, producing a total of 13.5 billion bushels.

“If these numbers play out,”?Newsom said, “we may have passed the tightest supply since 1995-96.

“However, it’s highly doubtful. We have no margin for error.”

He added that if spring weather “straightens out” then trend yields can still be reached where corn has already been planted.

But that still leaves the late-planted acres in the north and the flooded acres in Missouri unaccounted for, he said.

Soybean surprise

Likewise, soybeans traded 11 cents lower by noon after the USDA’s ending stocks estimate for 2011 was also increased from 140 million bushels in April, to 170 mb.

“But soybeans are the most changeable numbers,”?Newsom said, “we just don’t have a feel for what the ending will be.”

Newsom said traders and growers must keep in mind that the May report is always the first snapshot of the growing season.

He said weather will still affect yields one way or another and advised growers that if they can be planting, they should stay in the field and not trade their grain.

“And if they’ve been rained out, they should find something else to do,”?Newsom said.

The USDA’s estimates for the 2012 crop year calls for 76.6 million acres planted, with a national average yield of 43.4 bushels per acre, producing 3.28 billion bushels, and a 2012 ending stock of 1.54 million bushels, or 4.8 percent.

Wheat threatened

With severe drought devastating southwest winter wheat and rain delaying the planting of spring wheat in the northern states, Newsom said, “this crop is in much worst condition than the USDA shows.”

USDA estimates a harvest of 62 million bushels of winter hard red wheat, which Newsom said he has serious doubts will occur.

USDA is projecting a national average yield of 42.5 bushels per acre, but Newsom believes that figure will be closer to 40 bushels or lower.

Contact Larry Kershner at (515) 573-2141, Ext. 453 or at kersh@farm-news.com.