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Agricultural News


Latest Supply Demand Report Reflects More Corn Bushels Headed to Ethanol

Wed, 09 Feb 2011 10:24:49 CST

Latest Supply Demand Report Reflects More Corn Bushels Headed to Ethanol The latest Supply Demand numbers issued by the US Department of Agriculture show current stock levels of wheat, soybeans and cotton are unchanged from a month ago while corn stocks are slightly reduced from a month earlier, as another fifty million bushels is seen going into ethanol production.



Click here for the complete report from the Economic Research Service of the USDA.


Here's a breakdown commodity by commodity from the Wednesday morning report:


Wheat   

U.S. wheat supply, use, and ending stocks projections for 2010/11 are unchanged this month. While the all-wheat projections are unchanged, several offsetting by-class adjustments are made to exports and domestic use. Exports of Hard Red Winter (HRW) and White wheat are each projected 10 million bushels higher. Hard Red Spring (HRS) wheat exports are projected 20 million bushels lower. Domestic use is projected 10 million bushels lower for HRW and 10 million bushel higher for HRS. The marketing-year average price received by producers is projected at $5.60 to $5.80 per bushel, up 10 cents on the lower end of the range. Continued gains in cash and futures prices boost the farm price outlook for the remainder the marketing year.



Feed Grains   


U.S. corn ending stocks for 2010/11 are projected 70 million bushels lower this month with higher expected food, seed, and industrial use. Corn used for ethanol is projected 50 million bushels higher on a higher-than-expected November final ethanol production estimate and weekly ethanol data that indicate record output for December and January. Rising corn prices have reduced spot margins relative to variable costs to breakeven levels in recent weeks; however, ethanol blender incentives remain in place and export demand prospects remain strong with sugar-based ethanol uncompetitive at current sugar prices. Corn costs for many ethanol producers and other end users may also be below spot values to date as a substantial portion of this year's crop appears to have been forward priced. The continuing wide spread between reported monthly prices received by producers and substantially higher cash market bids can be explained by farmer deliveries of corn priced last year when prices were well below current levels.



Soybeans (Oilseeds)


U.S. soybean supply and use projections for 2010/11 are unchanged this month, leaving ending stocks at 140 million bushels. Although soybean export shipments are only modestly ahead of last year=s pace, record sales through the first 5 months of the marketing year are expected to result in stronger gains in the second half of the marketing year. Continued strong soybean meal export competition this spring, especially from Argentina, is expected to leave U.S. soybean crush well-below 2009/10 levels. Soybean oil exports are increased to 2.8 billion pounds reflecting continued strong export sales. Although soybean oil used for biodiesel during the first quarter of the marketing year was the lowest in 6 years, projected use for 2010/11 is unchanged from last month as biodiesel production is expected to accelerate due to the 2011 mandate and the return of the $1.00 per gallon blending credit.

The U.S. season-average soybean price range for 2010/11 is projected at $11.20 to $12.20 per bushel, unchanged from last month. Soybean oil prices are forecast at 51 to 55 cents per pound, up 3 cents on both ends of the range. Soybean meal prices are forecast at $340 to $380 per short ton, up 20 dollars on both ends of the range. Soybean product prices are raised this month based on strong year-to-date prices.



Cotton     


The 2010/11 U.S. cotton supply and demand estimates are unchanged from last month. The forecast for the average price received by producers of 79 to 84 cents per pound is raised 1 cent on the lower end and lowered 2 cents on the upper end of the range.



LIVESTOCK, POULTRY, AND DAIRY


The estimates of 2010 red meat and poultry production are adjusted from last month to reflect December production estimates. The production forecasts for 2011 are raised for beef, broilers, and turkey, but lowered for pork. Cattle placements during December were large and will result in higher-than-previously forecast slaughter in mid-2011. In addition, cow slaughter in the first half is expected to reflect currently high cull-cow prices. Cattle weights are also forecast slightly higher in the first half. Broiler production forecasts are raised for the first quarter to reflect relatively heavy broiler weights.


The turkey production forecast is raised as hatchery data points to a slower pace of contraction. Pork production is reduced slightly for the first quarter of 2011 as lower hog slaughter more than offsets continued high carcass weights. The forecast of egg production is raised from last month as demand for eggs remains firm.


The forecast for beef exports for 2011 is raised from last month primarily on larger expected exports to Asia. The forecast of beef imports is reduced as tight supplies in several exporting countries and a relatively weak U.S. dollar limit shipments. The pork export forecast for 2011 is raised largely due to expected increased sales of pork to Korea as herds have been culled due to foot-and-mouth disease. The broiler export forecast is raised for 2010 but the 2011 forecast is unchanged from last month.


The cattle price forecast for 2011 is raised to reflect continued strong demand for relatively tight supplies of cattle. Hog prices for 2011 are forecast higher on stronger demand. The broiler price forecast is lowered on larger supplies of broilers and competing meats.



   

 

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