WASHINGTON (DTN) — Stocks of corn will be tighter by the end of August, but a big crop coming this fall and softer global demand for U.S. corn will lead to bigger reserves by the end of the new crop year, USDA said in updated supply and demand tables released early Tuesday.
For soybeans, ending stocks for 2009/10 are unchanged, but USDA said it expects more beans on hand a year from now.
The market is likely to see these numbers as neutral for corn and neutral to bearish for soybeans and wheat when trade resumes later this morning, said DTN Analyst John Sanow.
U.S. SUPPLY AND DEMAND
This report was USDA’s first official projection of U.S. and global production and ending-stocks estimates for soybeans, corn and wheat for 2010/2011. It incorporated acreage data from the March 31 Prospective Planting report and updated yield estimates by USDA’s World Ag Outlook Board.
U.S. 2009/10 corn ending stocks are now projected at 1.738 billion bushels, down from 1.899 b bu forecast a month ago, with several adjustments to the balance sheet, beginning with a cut of 21 million bushels in 2009 production, which resulted from a resurvey of producers whose harvest was delayed in North and South Dakota. The 2009 corn crop is now estimated at 13.110 billion bushels. In addition, 2009/10 feed and residual use were cut 75 m bu, corn for ethanol was hiked 100 m bu and exports were raised 100 m bu.
For new crop, production is expected at 13.370 billion bushels on a yield of 163.5 bushels per acre, which is up 2.7 bpa from USDA’s trend yield. Initial 2010 exports are forecast at 2.0 b bu, corn for ethanol at 4.6 b bu and feed and residual use at 5.35 b bu, taking ending stocks for 2010/11 to 1.818 b bu.
“Lower-than-expected 2009/10 U.S. ending stocks of 1.738 bb could give the market an early boost, as both export demand and ethanol usage were increased,” Sanow said. “Assuming the increased demand numbers for both the 2009-2010 and 2010-2011 marketing years are verified, ending stocks-to-use ratios of 13.3 percent and 13.7 percent respectively would be relatively tight and leave a slim margin for error in terms of production.”
Season average farm corn prices are projected at $3.20 to $3.80 per bushel for 2010/11, compared to the 2009/10 forecast range of $3.50 to $3.70.
For soybeans, USDA projected 2010/11 ending stocks at 365 million bushels, compared to 190 m bu for 2009/10. New crop production is projected to total 3.310 billion bushels. USDA projected exports of 1.350 b bu and crush at 1.640 b bu. Soybean yield was pegged at 42.9 bushels per acre, unchanged from USDA’s trend yield.
For old crop, USDA left ending stocks unchanged at 190 m bu.
“This takes stocks-to-use from 5.7 percent to 11.6 percent, indicative of a more bearish fundamental situation as we move further into 2010,” Sanow said.
In wheat, USDA called for 2010/11 ending stocks of 997 million bushels, with production totaling 2.043 b bu, and exports of 900 m bu. Old-crop wheat stocks were left unchanged at 950 m bu. Wheat yield for 2010/11 was pegged at 43.4 bushels per acre.
“Stocks-to-use for both 2009/10 and 2010/11 remain at a cumbersome 46.6 percent and 47.3 percent respectively,” Sanow said.
WORLD SUPPLY AND DEMAND
In initial projections for 2010/11 world ending stocks, USDA’s WAOB called for increases in corn, soybeans and wheat, compared to 2009/10.
Soybean ending stocks will increase to 66.09 million metric tons, up from a revised 63.76 MMT for 2009/10. “The 2010/11 marketing year would be another record, which points to a more bearish supply-and-demand situation into 2011,” Sanow said.
Corn ending stocks are expected to total 154.21 MMT, up MMT from a revised 147.04 MMT in 2009/10.
World wheat ending stocks will increase to 198.09 MMT, up from 193.37 MMT for 2009/10. “This means wheat has a long road ahead of it to shake the overwhelmingly bearish fundamental situation it faces longer term,” Sanow said.
NASS WINTER WHEAT PRODUCTION
U.S. winter wheat production will total 1.458 billion bushels, according to the monthly crop production report from USDA’s National Ag Statistics Service. Ahead of the report, the average guess from analysts was 1.434 b bu, so this number may be considered neutral to bearish when trade resumes later this morning.
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Posted with DTN Permission by Haylie Shipp
