Friday, April 08, 2011
USDA Did Not Cut The Corn Ending Stocks Any Further In The April Supply-Demand Report
USDA did not reduce the already low carryout for old crop corn in its April Supply Demand Report. And it was the same news for soybeans, although some internal adjustments were made in the amount of grain and oilseeds that were allocated to different markets. Wheat carryout was lowered slightly.
In the April USDA Supply Demand report http://www.usda.gov/oce/commodity/wasde/latest.pdf released this morning, USDA said, “a projected 50 million bushel increase in corn use for ethanol is offset by a reduction in expected feed and residual use. U.S. corn feed and residual use is lowered 50 million bushels as increased prospects for 2011 SRW wheat production and higher year-to-year corn plantings in the South reduce expected corn feed and residual disappearance during the second half of the 2010/11 corn marketing year.” USDA did lower global corn ending stocks because of increased feeding in China and other nations.
Feed use was dropped from 5.2 bil. bu. to 5.15 bil., ethanol use was raised from 4.95 bil. to 5.0 bil bu. The carryout was retained at 675 million bu. with an average farmgate price in the range of $5.20 to $5.60. The market was expecting the carryout to drop to 595 mil. bu.
For soybeans, USDA forecast a 10 million bushel drop in exports due to the slowdown in the pace of exports. The crush was cut by 5 mil. bu. and residual use was raised, with no change to the 140 mil. bu. ending stocks. Globally, production and ending stocks are raised by 2.5 million tons. Traders were expecting the ending stocks to be cut to 137 mil. bu.
Soybean crush was reduced from 1.655 bil. bu. to 1.650 bil. bu. Exports were dropped from 1.590 to 1.580 bil. bu. and the residual was raised from 19 to 36 mil. bu. The carryout was kept at 140 mil. bu., and the average farmgate price was narrowed to $11.25 to $11.75.
Wheat ending stocks were lowered by USDA to reflect more being used for seed. Globally, supplies are unchanged, but with less wheat feeding, ending stocks are projected slightly higher.
To read the Crop Report Summary by University of Missouri marketing specialist Melvin Brees, click here.
Posted by Stu Ellis on 04/08 at 07:52 AM | Permalink
Comments
Posted by: Jib at April 9, 2011 3:03PM
So the question becomes; “What would corn usage have been if ending stocks were not this tight?” We could see 100 million more bushels of new crop wheat being fed and another 50 or so million bushel available from early maturing new crop corn planted in the south. This corn estimate is 2.9% of expected corn production in the 13 top broiler growing states. Imports are already indicated at maximum historic levels so not much increase is expected there but we could have 150 million bushels of corn or corn substitutes available for the 2010-11 marketing year. That would allow for 13,650 million bushels of old corn crop demand. That level is seemingly within an expected usage level. So high prices are not rationing demand, it is allocating resources. (We will use it all without much of a decline in production in the industries that use corn.) However any early harvest corn use this year will reduce availability next year putting an increased need for a good new crop. Watch for the first estimates of the 2011-12 corn and wheat crops in the May balance sheet. The degree of new crop being fed in the old year might be indicated for corn and new crop feeding of wheat. The realization that corn is being allocated rather than rationed might start a peroid of bear spreading old vs new.
Jib aka Gibberish