I put off writing this week's column, telling myself it was due to wanting to cover the USDA and WASDE reports rather than just my normal procrastination. But for argument's sake, let's stick with the first theory, as Friday's reports provide lots of grist for the mill.

Probably the most anticipated number was the U.S. corn production estimate. While I'm not casting aspersions (wink, wink, nudge, nudge), the sour aftertaste from 2009-10 final production continues to linger, casting a certain pall over what USDA may have to say regarding 2010-11. One way of looking at it would be similar to, though on a much smaller scale than, the general population's trust of all things government directly following Watergate.

OK, that may be an overstatement. But to say the agricultural community is still in a state of disbelief over the reported record production from 2009-10 given the Job-like fall and winter conditions is an equal understatement. That makes me wonder if the September 2010-11 yield estimate of 162.5 bushels per acre is a makeup call along the lines of what is seen at a sporting event. For instance, an NBA guard driving the lane basically gets mugged, drawing no call whatsoever, followed up by a call on the offending team at the other end for no more than looking cross at someone.

The makeup call theory seems to make sense, particularly to those who place any value at all (not necessarily me) on weekly crop condition reports. Through much of the growing season, this year's crop has held a higher DTN Crop Index rating (based on the weekly government report percentages) than the 2009 crop that reportedly averaged 164.7 bpa. Therefore, estimating one set of government numbers based on a different set of government numbers, the logical conclusion would have been that the 2010 yield would be closer to 165.7 bpa. Can you imagine what the reaction would be Friday morning if that would have happened?

Since I mentioned the ill-fated and still somewhat dubious 2009-10 crop, it is interesting that it is still playing a role even though it has long since been displaced by concerns over the 2010-11 situation. Since this past April, total demand has steadily increased from 12.915 billion bushels to 13.405 bb. This 490-million-bushel increase has come from an 80-mb increase in export demand and a 410-mb increase in domestic demand (predominantly feed and ethanol).

Those sniffing for a conspiracy of some sort point to the low test weights that weren't accounted for in the final 2009-10 production numbers. This idea would then claim that it takes more bushels to fill whatever demand may have been originally projected. As the 2009-10 numbers continue to play out behind the scenes of the center-stage 2010-11 crop, this argument seems to be gaining merit.

While not the star anymore, 2009-10 corn continues to have an impact on 2010-11 supply and demand in its role in beginning stocks. Friday's September report showed 2010-11 ending stocks now at 1.386, more than 500 mb below where they were in April. Add in the decreased production numbers mentioned earlier, and new-crop ending stocks are now pegged at 1.116 bb. If realized, this would be the smallest domestic ending stocks figure since the 958 mb reported for the 2003-04 marketing year, while total projected demand of 13.44 bb is record large. The resulting ending stocks-to-use ratio of 8.3 percent would be the smallest since the 5.0 percent reported for the 1995-96 marketing year.

After all is said and done, do we know more about the 2010 crop than we did yesterday, or last week, or even last month when crop tours were making their way across the Corn Belt? I would argue that we do not. The idea that the crop isn't/wasn't there isn't new, meaning the weekly crop condition reports were nothing more than pointless rituals. A question moving forward from this year will be if anyone -- producers, traders, ag businesses, etc. -- who used to place value in these numbers still will.

The interesting thing is the bottom line has not changed. Certain things about the market we still think we know: that regardless of how the numbers shake out, the corn market is bullish. What we don't know is how bullish it might be. Our best read is in the deferred futures spreads, and with the weak carry in both the March-to-May and May-to-July futures spreads indicating an increasing bullish outlook from commercial traders, it may not matter if we ever know the actual supply-and-demand numbers behind the market.

Darin Newsom can be reached at darin.newsom@telventdtn.com

(AG/CZ)

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