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Agricultural News


Southern Plains Wheat Crop Numbers Left Unchanged- New Crop Corn Ending Stocks Dropped Dramatically

Thu, 09 Jun 2011 8:57:27 CDT

Southern Plains Wheat Crop Numbers Left Unchanged- New Crop Corn Ending Stocks Dropped Dramatically The USDA issued several reports Thursday morning, including the second look at the potential size of the US Winter Wheat Crop. Our own Ed Richards talked with Tom Leffler of Leffler Commodities about the numbers from this report- as well as the Supply Demand numbers from the ERS website as approved by the World Agricultural Outlook Board. Click on the LISTEN BAR below to listen to that conversation on Tom's take about the numbers from these two reports this morning. He believes the big response within market circles will be about the sharp reduction in new crop corn ending stocks.

Winter wheat production is forecast at 1.45 billion bushels, up 2 percent from the May 1 forecast but 2 percent below 2010. Based on June 1 conditions, the United States yield is forecast at 45.3 bushels per acre, up 0.8 bushel from last month but 1.5 bushels less than last year. Expected area for harvest as grain or seed totals 32.0 million acres, unchanged from May1. Hard Red Winter production, at 777 million bushels, is up 2 percent from a month ago. Soft Red Winter production is up 2 percent from last month and now totals 434 million bushels. White Winter production totals 240 million bushels, up 2 percent from last month. Of this total, 11.6 million bushels are Hard White and 228 million bushels are Soft White.

While overall Hard Red Winter Wheat Crop numbers were higher, the numbers for three of the major producing states, Kansas, Oklahoma and Texas, were left unchanged from a month ago. The 2011 Kansas wheat crop is expected to be 27% smaller than a year ago at 261.8 million bushels, the Oklahoma crop is continues to be called at 74.8 million bushels, 37% smaller than in 2010 and the Texas harvest expected to be very disappointing at 46.8 million bushels, 73% under the 2010 harvest total.

Click here for the full Crop Production Report from USDA as released on Thursday morning, June 9, 2011.

Meahwhile, the World Outlook Board of the USDA released their monthly Supply Demand report onthe ERS website for all major crops as well as global meat outlook. The ERS cautions that due to the time of year that a lot of factors are in flux and that the resulting numbers are highly tenative. USDA does predict higher wheat prices here in the new marketing year that has just started- twenty cents a bushel higher for both the market low as well as the market high. That new, higher plateau ranges from $7.00 to $8.40. The corn and soybean price ranges given in this report are also significantly higher for the marketing year, while cotton market price projections were left unchanged.

Click here for the complete Supply-Demand Numbers from the June 9, 2011 report.

The ERS report says regarding wheat:


U.S. wheat supplies for 2011/12 are lowered this month as reduced carryin more than offsets an increase in expected production. Beginning stocks are lowered 30 million bushels with a 10-million-bushel reduction in imports and a 20-million-bushel increase in exports for 2010/11, both based on the pace of shipments to date. All wheat production for 2011/12 is forecast at 2,058 million bushels, 15 million higher than last month. The winter wheat production forecast is raised 26 million bushels with higher forecast yields for Hard Red Winter, Soft Red Winter, and Soft White Winter wheat. Partly offsetting is a projected 11-million-bushel reduction for durum and other spring wheat production as seedings are projected 290,000 acres lower. Flooding and persistent wet soils have delayed planting in North Dakota and Montana well beyond the normal planting window.

U.S. wheat usage for 2011/12 is unchanged. Ending stocks are projected 15 million bushels lower at 687 million bushels, but remain above the 10-year average. The 2011/12 season-average farm price for all wheat is projected at a record $7.00 to $8.40 per bushel, up 20 cents on both ends of the range, reflecting both tighter domestic supplies and higher expected corn prices. The forecast 2010/11 wheat farm price is also raised this month, up 5 cents per bushel to $5.70 per bushel.

For Course Grains:


Projected U.S. feed grain supplies for 2011/12 are sharply lower with reduced prospects for corn acreage. Corn planted area for 2011/12 is lowered 1.5 million acres from March intentions to 90.7 million acres. Planting delays through early June in the eastern Corn Belt and northern Plains are expected to reduce planted area, more than offsetting likely gains in the western Corn Belt and central Plains where planting was ahead of normal by mid-May. Harvested area is lowered 1.9 million acres, to 83.2 million with the additional 400,000-acre reduction reflecting early information about May flooding in the lower Ohio and Mississippi River valleys and June flooding along the Missouri River valley. Production is projected at 13.2 billion bushels, down 305 million from last month, but still a record, and up 753 million from 2010/11.

U.S. feed grain usage changes for 2011/12 include a 100-million-bushel projected decline in corn feed and residual use and a 5-million-bushel increase in sorghum exports. Feed grain ending stocks are sharply lower with expected corn ending stocks down 205 million bushels to 695 million. Corn ending stocks are projected 35 million bushels lower than beginning stocks indicating a stocks-to-use ratio of 5.2 percent compared with the 2010/11 forecast ratio of 5.4 percent. The 2011/12 season-average farm price for corn is projected at a record $6.00 to $7.00 per bushel, up 50 cents on both ends of the range. Projected farm prices are also raised for the other feed grains.

Global coarse grain supplies for 2011/12 are projected down 7.8 million tons this month with lower beginning stocks and production. Reduced U.S. corn production, lower EU-27 barley production, and reduced corn beginning stocks in China, more than offset increases in China corn production. EU-27 barley production is lowered 2.2 million tons as prolonged dryness across western and northern Europe has sharply reduced yield prospects in the major producing countries. China corn area is raised for 2010/11 in line with the most recent official government area estimates with the year-to-year percentage increase for 2011/12 largely maintained.

For Soybeans:

This month's U.S. oilseed supply and use projections for 2011/12 include higher beginning and ending stocks and reduced exports. Although adverse weather has slowed soybean planting progress this year, area and production estimates are unchanged with several weeks remaining in the planting season. Higher beginning stocks reflect a lower export projection for 2010/11. Soybean exports for 2010/11 are reduced 10 million bushels to 1.54 billion bushels reflecting the export pace to date for the marketing year and reduced global import demand, led mainly by lower projected imports for China.

Soybean ending stocks for 2010/11 are projected at 180 million bushels, up 10 million. U.S. soybean exports for 2011/12 are reduced 20 million bushels to 1.52 billion, reflecting increased competition from South America resulting from an increase in the recently harvested Brazilian soybean crop. With larger supplies and reduced exports, ending stocks for 2011/12 are increased 30 million bushels to 190 million. Other changes for 2010/11 include reduced soybean oil used for biodiesel production, reduced projected food use of soybean oil, and lower soybean oil exports, all resulting in increased ending stocks for 2010/11 and 2011/12.

Soybean, meal, and oil prices are all raised this month. Led by higher corn prices, the U.S. season-average soybean price for 2011/12 is projected at $13.00 to $15.00 per bushel, up $1.00 on both ends of the range. Soybean meal prices for 2011/12 are projected at $375 to $405 per short ton, up 25 dollars on both ends of the range. Soybean oil prices are projected at 58 to 62 cents per pound, up 2 cents on both ends of the range.

For Cotton:

This month's 2011/12 U.S. cotton supply and demand estimates include offsetting revisions which leave ending stocks unchanged from last month. Beginning stocks are raised 500,000 bales, reflecting lower estimated exports for 2010/11. Production is reduced 1.0 million bales to 17.0 million, due mainly to expected higher abandonment resulting from the increased severity of the drought in the Southwest. With lower available U.S. supplies and marginally lower world imports, exports are reduced 500,000 bales to 13.0 million. The stocks-to-use ratio of 15 percent is above 2010/11, but remains the second lowest since 1995/96. The projected range for the marketing year average price received by producers is unchanged from last month at 95 to 115 cents per pound.

Changes to the 2011/12 world projections primarily reflect higher beginning stocks, lower production in the U.S. and lower consumption by China. In addition to the substantial decrease in the U.S. crop, production is reduced in Uzbekistan, but is raised in Mexico and Turkey. Forecast consumption by China is reduced 500,000 bales, as the recent slow pace of imports indicates sluggish demand now and early in the new marketing year. Similar to the U.S., China's projected stocks-to-use ratio, if realized, would be the second smallest in 22 years. Imports are reduced for Hong Kong, Mexico, Pakistan, and others, while exports are reduced for the U.S. and Uzbekistan, but raised for Australia and Brazil. World ending stocks are raised marginally.

This month's most significant changes to the 2010/11 estimates are lower trade-especially lower imports by China and lower exports by the U.S.-and lower estimated consumption by China and India. The estimated range for the U.S. marketing-year average price received by producers of 81 to 83 cents per pound is lowered one cent on the upper end of the range.


   
   

Ed Richards talks with Tom Leffler on the Thursday morning USDA reports
right-click to download mp3

 

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