Corn, soybeans supplies still tight in this month's WASDE
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The increase in corn stocks was not as drastic as predicted in the March stocks report. Today's WASDE report showed ending stocks at 757 million bushels, up only 125 million bushels from the March estimate, explained American Farm Bureau Federation Economist Todd Davis.
“The stocks report found 400 million bushels more than the pre-stocks report forecast. And although the projected corn stocks are up slightly from the March projection the stocks-to-use ratio is still straggling, at 6.8 percent.
“There is not a large buffer of corn available to withstand weather or other production related problems for this year's crop,” said Davis. “Planting will start in the Midwest in the next few weeks, and the latest report, if realized, shows ending stocks to be the smallest since 1995-96.”
The USDA reduced feed and residual use by 150 million bushels but increased the corn for ethanol demand by 50 million bushels to 4.55 billion bushels. Davis said an expected element of the report is the decrease in export use.
“USDA lowered export use predictions by 25 million bushels to 800 million. That is a 48-percent decrease from the 2011-12 marketing year, and if realized, would be the lowest corn export since 1971-72,” said Davis. “This is a reflection of our already elevated corn prices.”
While corn showed an increase in ending stocks, the report left soybean ending stocks unchanged from the March estimate of 125 million bushels, despite the pre-reports indicating a slight increase. The stocks-to-use ratio for soybeans is tighter than corn at 4.1 percent, and there is approximately 15 days of soybean supply on hand on Sept. 1.
Summarized information on prices, production, and exports from the report is below:
Wheat: U.S. wheat ending stocks for 2012/13 are projected 15 million bushels higher this month with a small increase in seed use more than offset by lower expected feed and residual disappearance. Seed use for 2012/13 is raised slightly based on producer planting intentions for 2013/14. Feed and residual use for 2012/13 is projected 15 million bushels lower reflecting lower-than-expected disappearance during the December-February quarter as indicated by the March 1 stocks. Feed and residual use is projected lower for Hard Red Winter (HRW) and Hard Red Spring wheat, but declines are partly offset by higher expected feed and residual use for Soft Red Winter and White wheat. All-wheat imports are unchanged, but a small increase in HRW wheat is offset by a decline in durum. The projected range for the wheat season-average farm price is narrowed 5 cents on both ends to $7.70 to $7.90 per bushel. Global wheat supplies for 2012/13 are raised 2.9 million tons on higher world beginning stocks with the biggest increases for EU-27, Morocco, and Mexico. The increased stocks primarily reflect balance sheet revisions that lower 2011/12 domestic wheat use for several countries this month. Global 2012/13 production is nearly unchanged, but notable changes are made for some countries. Production is raised 0.5 million tons for Morocco with an upward yield revision.
Coarse Grains: U.S. feed grain ending stocks for 2012/13 are projected higher this month as an increase in ending year corn stocks more than offset reductions for sorghum, barley, and oats. Corn feed and residual disappearance is lowered 150 million bushels reflecting indicated disappearance for the first half (September-February) of the marketing year. The reduction in corn feed and residual use is partly offset by a combined 20-million-bushel increase in projected feed and residual use for the other feed grains based on the March 1 stocks. Adding to 2012/13 feed grain supplies this month are increases of 3 million bushels and 2 million bushels, respectively, in projected barley and sorghum imports. Domestic corn use for 2012/13 is projected 100 million bushels lower as a 50-million-bushel increase in corn used to produce ethanol partly offsets the lower projection for feed and residual disappearance. Larger-than-expected March corn supplies, lower corn prices, and favorable margins for producing and blending ethanol limit the expected year-to-year decline in ethanol production during the second half of the marketing year (March-August). Corn exports for 2012/13 are projected 25 million bushels lower reflecting the continued sluggish pace of sales and shipments and additional competition from Brazil and Ukraine. Projected U.S. corn ending stocks for 2012/13 are raised 125 million bushels. Corn exports are lowered 0.6 million tons for the United States and 0.5 million tons for South Africa, but exports are raised 0.5 million tons each for Brazil and Ukraine.
Rice: Higher-than-previously expected March U.S. rice stocks, as reported by the National Agricultural Statistics Service (NASS) on March 28, results in a 5.0- million-cwt reduction in all rice 2012/13 domestic and residual use, and a commensurate increase in ending stocks. No changes are made on the 2012/13 supply side or to projected exports. Long-grain 2012/13 domestic and residual use is lowered 4.0 million, and medium- and short-grain domestic use is lowered 1.0 million. The all rice 2012/13 export projection is unchanged at 108.0 million cwt. NASS estimated March 1 all rice rough stocks at 104.3 million cwt and milled rice stocks at 6.7 million cwt (9.5 million on a rough-equivalent basis). The March 1 all rice stocks estimate on a rough-equivalent basis at 113.8 million cwt is up 0.8 percent from a year earlier, and up 0.9 percent from the preceding 5-year average. The decrease in 2012/13 domestic and residual use led to a 5.0 million cwt or 17 percent increase in all rice ending stocks to 34.1 million cwt.
Oilseeds: The U.S. soybean crush for 2012/13 is increased 20 million bushels this month to 1.635 billion. The increase reflects strong soy bean meal exports through the first half of the marketing year. Increased U.S. soybean meal exports partly offset reduced meal exports for Brazil and Argentina as crush in those countries declines more quickly than expected on reduced supplies resulting from last year's drought. Soybean exports are projected at 1.35 billion bushels, up 5 million on stronger-than-expected shipments in recent weeks. Residual use is reduced based on indications from the March 28 Grain Stocks report. U.S. soybean ending stocks are projected at 125 million bushels, unchanged from last month.
Sugar: Projected U.S. sugar supply for fiscal year 2012/13 is decreased 122,000 short tons, raw value, from last month, as lower production more than offsets higher imports from Mexico. Lower planted area and later seeding of the 2013 sugarbeet crop, compared with last year, reduce expected early harvest and sugar production in August and September. For 2012/13 sugar use, the strong pace to date supports an increase of 100,000 tons. For Mexico, 2012/13 cane sugar production is increased based on increased sugarcane yields. Exports are increased both to U.S. and world markets, while higher ending stocks are in line with recent government forecasts.
Livestock, Poultry, and Dairy: The 2013 forecast of total red meat and poultry production is lowered from last month. Beef production is forecast down as lower expected fed cattle and bull slaughter more than offset greater cow slaughter. The pork production forecast is raised as the March 28 Quarterly Hogs and Pigs report indicated a slightly higher-than-expected first-quarter pig crop and a smaller decline in the number of sows which farrowed or are expected to farrow in the first half of the year. Hog carcass weights are also raised as feed prices are forecast lower. The broiler production forecast is lowered for the first quarter based on production data to date, but subsequent quarters are unchanged. Turkey production is forecast lower as the turkey price forecast is reduced and hatchery data points to a slowdown in poult placements. The egg production forecast is lowered, reflecting recent hatchery data. The beef export forecast for 2013 is lowered, reflecting the pace of trade in the first quarter.
Cotton: This month's 2012/13 U.S. cotton estimates include offsetting increases in production and exports, resulting in ending stocks of 4.2 million bales, unchanged from last month's forecast. Production is raised 280,000 bales based on USDA's final Cotton Ginnings report, released March 25, 2013. Domestic mill use is unchanged.
The full WASDE report can be viewed here.
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