by Linda H. Smith, DTN Markets Editor
WASHINGTON (DTN) — USDA met or exceeded trade expectations for reductions in corn yield and production but its report was bearish regarding most other measures, both domestically and globally. U.S. and global ending stocks all were above the average trade estimates.
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CROP PRODUCTION
USDA trimmed its estimate of national average corn yield to 148.1 bushels per acre from the August estimate of 153 bpa. That’s a slightly greater cut than the average trade estimate, at 148.8.
The corn crop was pegged at 12.5 billion bushels from 84.4 million acres harvested, meeting trade expectations.
Soybean yield was raised slightly, to 41.8 bushels an acre from 41.4 bpa. The crop was raised from 3.056 billion bushels to 3.085 billion bushels, with a harvested acreage figure of 73.8 million. This production figure was near the high end of the pre-report range and slightly above average trade expectations of 3.025 billion.
For Crop Production: http://usda.mannlib.cornell.edu/…
2011-2012 DEMAND AND ENDING STOCKS
Corn: USDA reduced total use by 400 million bushels, to 12.76 billion bushels. The economists trimmed 200 mb from feed and residual, 100 mb from ethanol, and 100 mb from exports. Carryout dropped to 672 million from August’s 714 mb. The stocks-to-use ratio is 5.3{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}, only a touch above the record low of 5.0{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}. The estimated average price rose from $6.70 to $7.
Soybeans: Looking at soybean usage, crush was left unchanged, exports and residual use rose, and seed fell. Resulting ending stocks were pegged at 165 mb, up 10 million from August, but still 60 mb below old-crop ending stocks. Ending stocks-to-use is 5.2{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}, a level that the market is generally comfortable with. The average price estimate rose modestly from $13.50 in August to $13.65.
Wheat: Counter to expectations, all-wheat ending stocks rose to 761 million bushels from August’s 671 mb, 33{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3} of expected total use. USDA reduced exports 75 mb and food use 5 mb; left feed and residual use unchanged from August, at 240 mb, versus 133 for the 2010-11 crop year. USDA raised its average price estimate form $7.60 in August to $7.85.
“The USDA supply and demand report should be viewed as bearish for soybeans and wheat, neutral to bearish for corn,” said DTN Senior Analyst Darin Newsom.
WORLD ENDING STOCKS
Corn: Despite a lower world production estimate, global ending stocks of corn rose from August estimates to 117.39 million metric tons, contrary to trade expectations for a reduction to 112.52 mmt. The feed category was reduced 5 mmt.
Soybeans: Likewise, global ending stocks of soybeans rose from 60.95 mmt in August to 62.55 mmt. China’s use — and imports — were left unchanged, at 71.6 mmt and 56.5 mmt, respectively, disappointing the trade, which was looking for increases.
Wheat: Again, contrary to trade expectations, 2011-12 wheat ending stocks rose from August’s 188.87 mmt to 194.59 mmt. Increased beginning stocks and production more than offset slightly higher domestic use and almost unchanged exports.
“World ending stocks for all three grains were increased for both 2010-11 and 2011-12. This eases some of the concern in corn, as demand was trimmed more the 7 mmt and South American production was increased 5.5 mmt,” Newsom said. “Wheat ending stocks grew to almost 195 mmt, putting ending stocks to use at 28.7{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}. Soybean ending stocks increased to 62.55 mmt with ending stocks to use just short or 24{e7e4ba4d9a3c939171d79cae1e3a0df1d41e5a91c3c4158fbb92284b490bc9d3}.”
For World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
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Posted with DTN Permission by Haylie Shipp
