As expected, USDA reduced 2010 corn crop production to 12.45 billion bushels from its December estimate due to a 1.5-bushel-per-acre decrease in national yield.
Soybean production was trimmed from 3.37 billion to 3.33 billion with yield at 43.5 bushels per acre.
“Larger decreases than expected to both corn and soybeans should be considered bullish,” said DTN Analyst John Sanow.
For Crop Production: http://usda.mannlib.cornell.edu/…
For the Crop Production Annual Summary: http://usda.mannlib.cornell.edu/…
For Grain Stocks: http://usda.mannlib.cornell.edu/…
For World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
For Winter Wheat Seedings: http://usda.mannlib.cornell.edu/…
USDA LOWERS U.S. ENDING STOCKS
There will be less corn and soybeans on hand at the end of the 2010-11 marketing year, USDA indicated in its monthly January supply and demand report.
USDA tightened its forecasts of 2010-11 ending corn and soybean stocks, and it also cut forecasts for global grain and oilseed stocks in the December supply and demand report released early Wednesday.
In the U.S. tables, USDA’s World Ag Outlook Board cut ending stocks of corn to 745 million bushels, from 832 million bushels in the December report. This reflects a 1.5-bushel-per-acre reduction in national yield and 100 million more bushels used for ethanol.
USDA now pegs soybean ending stocks at 140 million bushels, down 25 m bu from December, and slightly below the average pre-report estimate.
In the wheat supply and demand table, USDA cut 2010-11 ending stocks by 40 million bushels, to 818 m bu, within the trade estimated range.
In the world tables, USDA slightly tightened ending stocks, with corn ending stocks at 127.00 mmt. Soybeans dropped to 58.28 mmt from 61.41 in December. In the world wheat supply and demand table, USDA took ending stocks up to 177.99 mmt, from 177.99 mmt in the December report.
“On the world side, the report should be considered neutral for corn and beans, bearish for wheat,” Sanow said. “Ending stocks were lowered in corn and beans, but both were only slightly below the average pre-report estimates. In wheat, traders expected a decrease; instead, USDA raised the world number to 177.99 in large part due to increased production in Argentina and decreased global demand.”
QUARTERLY GRAIN STOCKS
The quarterly stocks number for corn came in at 10.0 billion bushels, making it the smallest first-quarter stocks number in four years. This implies the largest first-quarter usage as a percentage of the crop since 1995. It was within trade estimates and very close to the average guess of 10.067 b bu.
Soybean stocks in all positions came in at 2.28 b bu, implying the second-largest first-quarter disappearance relative to production, thanks to strong Chinese demand in the first quarter of 2010-11. The trade average expectation was 2.345.
Close to the trade’s expectation for wheat stocks on hand of 1.938 b bu, USDA’s 1.93 b bu puts it up 8 percent from last year at this time and the largest second-quarter stocks estimate since the 1987-88 marketing year.
“Quarterly stocks should be considered neutral to bullish for corn, wheat and beans, as all three came in slightly below the average pre-report estimates,” Sanow said. “In regard to corn and beans, it seems to confirm strong demand and the bullish longer-term market structure in place for both.”
WINTER WHEAT ACREAGE
It is no surprise that more U.S. acres were planted to winter wheat this fall. USDA reported total winter wheat acreage up 10 percent, at 40.99 million. Hard red winter rose 4 percent to 29.6 million; soft red wheat rose a whopping 47 percent to 7.76 million and white wheat was up 4 percent, at 3.66 million. All are within trade expectations.
“Planted acreage for winter wheat should be considered neutral, as it came in slightly above the average pre-report estimate,” Sanow said. “Traders may continue to question this number, though, considering the poor condition of the hard red winter crop heading into dormancy in the Southern Plains.”
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Posted with DTN Permission by Haylie Shipp