Agricultural News
Latest USDA Data Provides Soy Surprise
Tue, 09 Nov 2010 11:21:38 CST
Both corn and soybean stocks are tighter than expected, based on the latest USDA data released on Tuesday morning.
DTN Analyst Darin Newsome says higher prices are starting to do their job of rationing supply- “USDA seems to be catching up with what futures spreads starting indicating in late May to mid-June: corn supplies are far tighter than originally thought. Following Tuesday's report, domestic corn ending stocks-to-use ratio decreased to the second smallest on record at 6.2 percent as production estimates continue to fall. However, overall demand is starting to slow due to the price rally, with the combined export, ethanol, and feed usage off 50 million bushels.”
In this mornings Crop Production figures, USDA reports the corn and soybeans even lower than the early trade estimates, with corn coming in at 12.54 billion with a yield of 154.3 bushels per acre. Soybeans were also pegged lower at 3.75 billion with a yield of 43.9 bushels per acre.
Ending stocks were also lower than the trade estimates with corn, soybeans and wheat, all coming in lower.
Government economists raised their forecast of season-average cash grain prices Tuesday, after shaving production estimates for corn, wheat and soybeans by about 1% each. The USDA now projects domestic crop output for 2010 at 12.5 billion bushels of corn, a record-high 3.38 billion bushels of beans and 2.2 billion bushels of wheat.
"The U.S. season-average soybean price range is projected at $10.70 to $12.20 per bushel, up 70 cents," said the agency in its November crop report. "Soybean exports are raised 50 million bushels to a record 1.57 billion, due to increased global import demand and to a record sales pace, especially to China which accounts for over 70% of known U.S. soybean export sales through October."
USDA also raised its forecast of season-long cash corn prices by 20 cents, but kept its outlook for 2010/11 wheat prices nearly unchanged.
With the unexpected cut on U.S. soybean production and increased demand, domestic soybean ending stocks are now projected at 185 million bushels, down 80 million from last month. Por corn yields also forced the agency to make a 75 million bushel cut in U.S. corn ending stocks for 2010/11, now pegged at 827 million bushels.
Radio Oklahoma's Ed Richards spoke with Tom Leffler of Leffler Commodities about this morning's USDA crop numbers, and you can hear Tom's analysis by clicking on the listen bar below.
Click here for the USDA Crop Production Numbers as of November first, as issued this morning.
And, click here for the USDA Supply Demand data as released from the Economic Research Service of USDA this morning as well.
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