USDA reports confirm expectations of tighter corn and soybean supplies
By Agri-Pulse Staff
© Copyright Agri-Pulse Communications, Inc.
Washington, Jan. 13 - USDA reports Wednesday confirmed expectations of tighter supply situations both in the U.S. and globally, raising prospects that commodity prices will continue climbing over the months ahead.
Key numbers in USDA's Jan. 12 World Agricultural Supply & Demand Estimates (WASDE) report show U.S. ending stocks for corn lowered from December's 832 million bushels to 745 million and soybean ending stocks down from December's 165 million bushels to 140 million.
The WASDE report notes that “Ending corn stocks for 2010/11 are projected 87 million bushels lower at 745 million. This is down 963 million bushels from last year. The stocks-to-use ratio is projected at 5.5 percent, the lowest since 1995/96 when it dropped to 5.0 percent.” The report raises its 2010/11 marketing-year average farm price projection 10 cents on both ends of the range to $4.90 to $5.70 per bushel. With the March future price soaring above $6.49 midday Thursday, USDA notes that “Heavy early season marketings of corn priced well below current cash price levels are expected to limit the upside potential for the weighted average price received by producers.”
For soybeans, USDA estimates production at 3.329 billion bushels, down 46 million bushels based on reduced harvested area and lower yields. USDA projects the 2010/11 U.S. season-average soybean price range at $11.20 to $12.20, up 50 cents on the lower end of the range.
The global picture is mixed. For wheat, global ending stocks are raised 1.3 million tons with increases for Europe, Argentina, and Australia more than offsetting a U.S. reduction. Global corn production is lowered 4.7 million tons with the U.S. reduction and a 1.5-million ton decrease for Argentina.
At a time when soybean demand continues increasing in China, the WASDE report states that “Global oilseed production for 2010/11 is projected at 440.4 million tons, down 2.3 million from last month. Global soybean production is projected at 255.5 million tons, down 2.3 million. . . Global oilseed ending stocks for 2010/11 are reduced 2 million tons to 68.3 million with Argentina and U.S. soybean stocks accounting for most of the change.”
For the U.S, USDA's Crop Production report shows that with both ethanol and export demand continuing to increase:
Corn production totaled 12.4 billion bushels, down 5 percent from the record high, set last year. Corn yield in 2010 is estimated at 152.8 bushels per acre, 11.9 bushels below last year's record. Planted area, at 88.2 million acres is the second largest since 1946, behind the 93.5 million acres record set in 2007.
The 2010 soybean production totaled 3.33 billion bushels, down only one percent from the record production, set in 2009. The average soybean yield in 2010 is estimated at 43.5 bushels per acre, 0.5 bushels below last year's yield. The area planted for soybeans in 2010, at 77.4 million acres, fell only fractionally short of last year's record.
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