Planting season is still underway but USDA's first crop assessment of the 2006-07 growing season is for smaller output in all major U.S. crops. U.S. soybean production is projected at 3.08 billion bu., down 6 million bu. from 2005-06, while U.S. exports are projected to increase to 1.09 billion bu. due to lower-than-expected Brazilian stocks. Soybean prices are expected to remain firm mainly due to relatively strong corn and soybean oil prices.

A 2006-07 U.S. corn crop of 10.55 billion bu. is projected, 5% off last year. Domestic corn use for ethanol production is forecast 34% higher to 2.15 billion bu., while exports are forecast 6% higher to 2.15 billion bu. due to reduced foreign competition and lower global feed-quality wheat supplies.

The 2006-07 U.S. wheat crop is forecast at 1.9 billion bu., down 11%, with winter wheat production expected to be down 12% due to increased abandonment and reduced yields. -- Elton Robinson, Farm Press