USDA boosts 2011/12 corn ending stocks, shrinks soybean supplies

By Sara Wyant

© Copyright Agri-Pulse Communications, Inc.

WASHINGTON, MAY 10 - Citing lower feed and residual disappearance, USDA projected higher domestic corn ending stocks for 2011-12, raising estimates to 851 million bushels compared to the April estimate of 801 million bushels. U.S. soybean supplies for 2011-12 were reduced by 40 million bushels, and wheat stocks were lowered by 25 million bushels.

“The large year-to-year increase in winter wheat production and attractive prices for wheat relative to corn are expected to raise summer wheat feeding,” USDA noted in its World Agricultural Supply and Demand Estimates released today. 

For the 2012/13 season, USDA says U.S. feed grain supplies are projected at a record 416.3 million tons, up 16 percent from 2011/12 with higher area and production for corn, sorghum, barley, and oats.

Corn production for 2012/13 is projected at a record 14.8 billion bushels, up 2.4 billion from 2011/12, according to USDA. A projected 5.1-million- acre increase in harvested area and higher expected yields, compared with 2011/12, sharply boost production prospects.

The 2012/13 corn yield is projected at a record 166.0 bushels per acre, 2.0 bushels above the 1990-2010 trend reflecting the rapid pace of planting and emergence. Despite the lowest expected carryin in 16 years, corn supplies for 2012/13 are projected at a record 15.7 billion bushels, up 2.2 billion from 2011/12.

USDA is also projecting corn for ethanol use to be 5 billion bushels for the 2012/13 marketing year.

Here are some other highlights from today's reports:

U.S. oilseed production for 2012/13 is projected at 97.0 million tons, up 6 percent from 2011/12. Higher soybean production accounts for most of the increase, but sunflower seed, canola, peanut, and cottonseed production also are all projected above last year.

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Soybean production is projected at 3.205 billion bushels, up from the 2011 crop as higher yields more than offset lower harvested area. Harvested area is projected at 73.0 million acres based on a 5-year average harvested-to-planted ratio and planted area of 73.9 million acres. Soybean yields are projected at 43.9 bushels per acre, up 2.4 bushels from 2011.

With beginning stocks projected at 210 million bushels, 2012/13 soybean supplies are projected at 3.43 billion bushels, up 4 percent from 2011/12.

U.S. soybean crush for 2012/13 is projected at 1.655 billion bushels, almost unchanged from 2011/12 as a lower extraction rate offsets reduced total soybean meal use. Total soybean meal use is projected down 1 percent as reduced exports are only partly offset by gains in domestic use. Increased soybean meal exports from Paraguay and Argentina are expected to exceed the limited gains in global import demand, resulting in reduced U.S. export prospects.


With increased 2012/13 U.S. soybean supplies and sharply lower South American soybean supplies on hand this fall, U.S. soybean exports are projected at 1.505 billion bushels, up 190 million from 2011/12. Ending stocks for 2012/13 are projected at 145 million bushels, down 65 million from 2011/12, leaving the stocks-to-use ratio at a historically low 4.4 percent. The U.S. season-average soybean price for 2012/13 is projected at $12.00 to $14.00 per bushel compared with $12.35 per bushel in 2011/12. Soybean meal prices are forecast at $335 to $365 per short ton, compared with $360. Soybean oil prices are projected at 52.5 to 56.5 cents per pound compared with 53.5 cents for 2011/12.


The 2012/13 outlook for U.S. wheat is for larger supplies and use, but lower prices. All wheat production is projected at 2,245 million bushels, up 12 percent from last year's weather-reduced crop and the highest since 2008/09.

The all wheat yield, projected at 45.7 bushels per acre, is up 2.0 bushels from last year, but 0.6 bushels below the 2010/11 level. The survey-based forecast for 2012/13 winter wheat production is up 13 percent with a forecast yield of 47.6 bushels per acre as a recovery in yields in the southern and central Plains boost Hard Red Winter (HRW) wheat production sharply from the previous year.

Partly offsetting is lower forecast production for Soft Red Winter wheat and White wheat compared with last year. Spring wheat production for 2012/13 is expected to rebound with a recovery in durum area and higher projected yields for other spring wheat, which are expected to offset the decline in other spring area. U.S. wheat supplies for 2012/13 are projected at 3,133 million bushels, up 5 percent from 2011/12.

Total U.S. wheat use for 2012/13 is projected up 8 percent year-to-year on higher expected domestic use and exports. Food use is projected at 945 million bushels, up 15 million from 2011/12 as flour extraction rates are expected to decline modestly from historical highs in recent years and consumption grows with population. Feed and residual use is projected at 230 million bushels, up 50 million from the 2011/12 projection as favorable wheat prices relative to corn and larger HRW supplies boost summer quarter wheat feed and residual disappearance.

U.S. exports for 2012/13 are projected at 1,150 million bushels, up 125 million from this month's 25-million-bushel higher projection for 2011/12. Larger supplies, more competitive prices, and an early expected start to this year's harvest open the door to higher demand for U.S. wheat during the coming months. U.S. ending stocks are projected to continue their decline from the recent high in 2009/10. At a projected 735 million bushels, 2012/13 ending stocks are expected down 33 million from 2011/12 and 241 million below 2009/10. The season-average farm price for all wheat is projected at $5.50 to $6.70 per bushel, down sharply from the record $7.25 per bushel projected for 2011/12.


The WASDE report estimated tighter rice ending stocks and higher prices for 2012/13, with stocks down 21 percent from 2011/12. U.S. 2012/13 all rice supplies are forecast at 239.0 million cwt, down 6 percent from 2011/12.


The U.S. 2012/13 long-grain rice season-average farm price is projected at $14.50 to $15.50 per cwt, compared to a revised $13.20 to $13.60 for the previous year. The combined medium- and short-grain price is projected at $17.25 to $18.25 per cwt, compared to $15.50 to $15.90 for a year earlier. The 2012/13 all rice price is projected at $15.30 to $16.30 per cwt, compared to a revised $13.90 to $14.30 per cwt for 2011/12.


Projected U.S. sugar supply for fiscal year 2012/13 is down 2.4 percent from 2011/12, as lower imports more than offset higher production and beginning stocks. Higher beet sugar production reflects higher area and trend yields, while cane sugar production is nearly unchanged from a year earlier. Imports under the tariff rate quota (TRQ) reflect the minimum of U.S. commitments to import raw and refined sugar and projected shortfall.


Total U.S. meat production in 2013 is projected to be above 2012 as higher pork and poultry production more than offsets continued declines in beef production. Lower forecast feed costs and relatively strong, albeit declining hog, broiler, and turkey prices are expected to provide incentives for continued pork and poultry expansion.


Pork production is expected to increase at about the same rate as 2012 as producers increase farrowings modestly, but the number of pigs per litter continues to grow. Broiler and turkey production for 2013 are also forecast higher as producers benefit from lower feed costs; however, increasing production will weigh on broiler and turkey prices, moderating the rate of expansion. Beef production will decline in 2013 due to tighter supplies of fed cattle and lower cow slaughter. Egg production is expected to decline in 2013 as producer returns in 2012 are affected by sharply lower egg prices.


For 2013, cattle prices are forecast above 2012 due to tight supplies of fed cattle. Hog, broiler, and turkey prices are forecast to decline from 2012 as production increases for all three meats. Egg prices are forecast higher on lower production.


Milk production for 2013 is forecast to increase slightly. High feed prices and weakening milk prices during 2012 are expected to pressure producer returns, leading to declines in 2013 cow numbers. However, improvements in returns during 2013 will moderate the rate of decline. Milk per cow is expected to continue to grow, supporting increased milk production.


Commercial exports are forecast to increase as the global economy improves and milk production increases. Imports will be slightly lower as domestic supplies increase. With improving demand and only modest increases in production, cheese, butter, and nonfat dry milk (NDM) prices are forecast higher. Whey prices will average near 2012 levels. Both Class III and Class IV prices are forecast higher, and the all milk price is forecast at $17.25 to $18.25 per cwt for 2013.


The U.S. cotton projections for 2012/13 include higher supply, demand, and ending stocks compared with 2011/12. Projected production is raised 9 percent based on Prospective Plantings and average yields. Above-average abandonment is projected at 20 percent due to continued drought on the Texas High Plains. Domestic mill use is projected at 3.5 million bales, 100,000 bales above 2011/12. Exports are projected at 12.0 million bales, 5 percent above last season due to the larger available supplies.


Ending stocks are raised to 4.9 million bales. The projected stocks-to-use ratio of 32 percent is well above the last three seasons, but only slightly above the 10-year average of 30 percent. The forecast range for the marketing-year average price received by producers is 65 to 85 cents per pound, compared with 91.0 cents estimated for 2011/12.


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