Agricultural News
Monthly WASDE Report from USDA Adds to Bearish Tone of Thursday Reports
Thu, 12 Jan 2012 09:12:17 CST
The fourth of four major grain industry reports released by USDA on Thursday morning was the World Agricultural Supply and Demand Forecasts- showing smaller corn and soybean crops in Argentina, as well as a slightly smaller soybean crop in Brazil. However, US grain stocks are generally higher than what traders were expecting and a down day on the commodity market is expected.
To view the entire WASDE report in pdf- click here.
Here's the summary of the numbers released on Thursday morning by the World Outlook Board and the ERS:
WHEAT:
U.S. wheat ending stocks for 2011/12 are projected slightly lower this month as reductions in expected domestic use mostly offset higher projected exports. Food use is projected 5 million bushels lower based on flour production data recently reported by the North American Millers' Association for July-September 2011. Feed and residual use is projected 15 million bushels lower as December 1 stocks, reported in the January Grain Stocks, indicate lower-than-expected disappearance during September-November. Seed use is raised 4 million bushels based on the winter wheat planted area reported in Winter Wheat Seedings. Projected exports are raised 25 million bushels based on the pace of sales and shipments to traditional markets. Increases for Hard Red Winter, White, and Soft Red Winter wheat more than offset a reduction for Hard Red Spring wheat. Ending stocks are projected 8 million bushels lower at 870 million. The 2011/12 season-average farm price is lowered 10 cents per bushel on each end of the range to $6.95 to $7.45 per bushel.
Global wheat supplies for 2011/12 are projected 2.7 million tons higher with production raised for Kazakhstan, Brazil, and Russia. Kazakhstan production is raised 1.5 million tons as nearly perfect growing season weather is reflected in a new record yield. Production is raised 0.8 million tons for Brazil, in line with the latest government estimate. Production for Russia is raised 0.2 million tons reflecting the latest official estimate.
Lower 2011/12 projected exports for Australia are more than offset by increases for the United States and Russia. Global consumption is raised with a 1.0-million-ton increase in expected domestic disappearance in Kazakhstan where record supplies will be difficult to store and maintain. Global ending stocks for 2011/12 are projected 1.5 million tons higher at 210.0 million.
COARSE GRAINS:
U.S. feed grain supplies for 2011/12 are projected higher as an increase in estimated corn production more than offsets a reduction for sorghum. Corn production is estimated 48 million bushels higher with a 0.5-bushel-per-acre increase in yield and a 45,000- acre increase in harvested area. Sorghum production is lowered 32 million bushels with yields estimated 0.9 bushels per acre lower and harvested area reduced 503,000 acres.
Corn use for 2011/12 is raised with higher exports. Exports are projected 50 million bushels higher reflecting the strong pace of sales to date and reduced prospects for Argentina. Ending stocks are projected 2 million bushels lower at 846 million bushels. The 2011/12 seasonaverage farm price for corn is lowered 20 cents per bushel on each end of the range to $5.70 to $6.70 per bushel. Prices received by producers to date have remained well below prevailing cash bids limiting the upward potential for the season-average farm price.
Other 2011/12 feed grain changes this month include a reduction for sorghum feed and residual use and an increase for barley feed and residual use, as indicated by the December 1 stocks. Sorghum exports are reduced with the smaller crop and sluggish export sales. The sorghum farm price is projected 10 cents per bushel lower on both ends of the range to $5.60 to $6.60 per bushel based on reported prices to date. The barley farm price is projected at $5.15 to $5.65 per bushel compared with $5.20 to $5.80 per bushel last month as reported farm prices for malting barley drag down the season average for all barley. The oats farm price range is narrowed 5 cents per bushel on both ends of the range to $3.25 to $3.55 per bushel.
Global coarse grain supplies for 2011/12 are nearly unchanged this month as higher corn production in the United States, Ukraine, EU-27, and Russia is mostly offset by lower expected corn production in Argentina and the lower sorghum production estimate for the United States. Global barley and oats production are also raised, mostly reflecting higher crop estimates from Russia.
Argentina 2011/12 corn production is lowered 3.0 million tons as extended dryness since late November and periods of extreme heat in late December and early January have sharply reduced yield prospects. Recent rains have brought much needed relief from high temperatures and dryness and are expected to stabilize crop conditions, but substantial damage has been done, especially to corn that was exposed to heat during pollination and early grain fill. Corn production is raised 1.5 million tons for Ukraine based on the latest official indications of record yields and output. EU-27 and Russia corn production are each raised 0.4 million tons based on the latest official estimates. Brazil corn production is unchanged as rising area prospects for second crop corn offset a reduction in first crop yields resulting from December and early January dryness in the southern growing areas.
Global corn trade for 2011/12 is raised slightly with lower projected corn exports from Argentina more than offset by higher exports from the United States and Russia. Imports are raised 1.0 million tons for China, more than offsetting reductions for Syria and Taiwan. World corn ending stocks are raised 1.0 million tons as lower stocks in Argentina are more than offset by higher stocks in Ukraine and China. At 128.1 million tons, global stocks are nearly unchanged from 2010/11.
OILSEEDS:
U.S. oilseed production for 2011/12 is estimated at 91.2 million tons, up 0.2 million tons from last month. Larger crops for soybeans and canola are partly offset by reductions for cottonseed, sunflowerseed, and peanuts. Soybean production is estimated at 3.056 billion bushels, up 10 million based on increased yields. The soybean yield is estimated at 41.5 bushels per acre, up 0.2 bushels from the previous estimate. Soybean crush is lowered 10 million bushels to 1.615 billion reflecting industry-reported data through the first quarter of the marketing year. Soybean exports are projected at 1.275 billion bushels, down 25 million from last month and down 226 million from 2010/11. Soybean ending stocks are projected at 275 million bushels, up 45 million. Soybean product changes include a lower soybean oil extraction rate, lower projected soybean oil exports, and increased soybean oil ending stocks.
The 2011/12 U.S. season-average soybean price range is narrowed 25 cents on both ends of the range to $10.95 to $12.45 per bushel. The soybean oil price is forecast at 50.5 to 54.5 cents per pound, unchanged from last month. The soybean meal price is projected at $290 to $320 per short ton, up 10 dollars on both ends of the range.
COTTON:
This month's 2011/12 U.S. cotton estimates include slightly lower production and lower exports, resulting in a net increase in ending stocks. Production is lowered 153,000 bales, as a reduction for upland cotton in Texas is partially offset by higher estimated extra long staple (ELS) cotton production. Domestic mill use is unchanged. Exports are reduced 300,000 bales to 11.0 million due to lower U.S. supplies and strong competition from foreign exports. Ending stocks are raised to 3.7 million bales, equivalent to 25 percent of total use. The forecast marketing-year average price received by producers of 86 to 94 cents per pound is narrowed 1 cent on each end of the range.
The world 2011/12 cotton estimates show slightly lower production compared with last month, with consumption reduced about 1 percent. Production is reduced mainly in India and the United States. Consumption is estimated 1.0 million bales lower for China, as the substantial accumulation of cotton in the national reserve is expected to support prices and constrain mill use. Consumption also is reduced for Thailand. World ending stocks are raised 700,000 bales to 58.4 million. The forecast stocks-to-use ratio of 53 percent is above both the 5- and 10-year averages.
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