Market News

USDA raises new crop ending stocks

The USDA’s most recent set of supply and demand revisions showed larger new crop ending stocks for U.S. corn, soybeans and wheat.

DTN market analyst John Sanow tells Brownfield the numbers weren’t too shocking and that he doesn’t think they’ll affect futures trade too much, “It’s reaffirming what the market has been telling us – our short term trends have been down in corn and wheat for some time and have recently turned lower in soybeans.”

2009/10 wheat ending stocks were reported at 706 million bushels, compared to June’s estimate of 647 million bushels. With the USDA increasing the production and average yield projections, the total supply was raised 94 million bushels to 2.894 billion. The estimates for food and seed use were left unchanged and the feed and residual use guess was up 10 million on the month to 230 million bushels, bringing the domestic use figure to 1.263 billion bushels. Export use was pegged at 925 million bushels, 25 million more than last month, taking total use to 2.188 billion bushels. The average 2009/10 farm price is seen at $4.80 to $5.80 per bushel, compared to $4.90 to $5.90 in June.

2008/09 wheat ending stocks came out at 667 million bushels, unchanged from June and up sharply from 2007/08. The average 2008/09 farm price is $6.78 per bushel, compared to $6.48 for 2007/08.

2009/10 corn ending stocks were placed at 1.550 billion bushels, compared to 1.090 billion in June. The USDA now sees production at 12.290 billion bushels, up 355 million from last month but left the average yield unchanged at 153.4 bushels per acre. Planted area was pegged at 87.0 million acres, up 2 million from a month ago and harvested area is seen at 80.1 million acres, compared to June’s guess of 77.8 million acres. Following the production revision, total supply is now projected at 14.075 billion bushels. USDA now pegs feed and residual use at 5.200 billion bushels, up 50 million, ethanol at 5.375 billion, down 35 million, and exports at 1.950 billion, 50 million more than June, taking the total use projection to 12.525 billion bushels. The average 2009/10 farm price is seen at $3.35 to $4.15 per bushel, compared to June’s range of $3.90 to $4.70.

2008/09 corn ending stocks were reported at 1.770 billion bushels, compared to 1.692 billion in June and 1.624 billion for 2007/08. The average farm price is $3.95 to $4.15 per bushel, compared to 2007/08’s $4.20.

2009/10 soybean ending stocks are projected at 250 million bushels, compared to 210 million in June. The USDA has this year’s crop at 3.260 billion bushels, compared to June’s guess of 3.195 billion, with the yield unchanged from last month at 42.6 bushels per acre. The planted area is pegged at 77.5 million acres, 1.5 million more than a month ago, with harvested area at 76.5 million acres, also up 1.5 million from June. With the changes to production, total supply is seen at 3.380 billion bushels. The crush estimate was increased 5 million bushels to 1.680 billion, exports were raised 15 million to 1.275 billion bushels and seed and residual use were both up 2 million from June at 94 million bushels and 81 million bushels, respectively, taking total use to 3.130 billion bushels. The average 2009/10 farm price is placed at $8.30 to $10.30 per bushel, compared to June’s range of $9 to $11.

2008/09 soybean ending stocks were unchanged from June at 110 million bushels. At this point in 2007/08, the estimate was 205 million bushels. The average 2008/09 farm price is $10 per bushel, compared to $10.10.

2009/10 soybean oil ending stocks came out at 2.480 billion pounds, compared to June’s estimate of 2.648 billion pounds. Following the changes to the soybean production projections, total supply is now pegged at 22.230 billion pounds. Domestic use was steady at 16.500 billion pounds but biodiesel use was lowered 200 million to 2.000 billion pounds. Exports were increased 300 million pounds to 3.250 billion, taking total use to 19.750 billion pounds. The average 2009/10 farm price is projected at $.31 to $.35 per pound, compared to June’s range of $.33 to $.37.

2008/09 soybean oil ending stocks were pegged at 3.085 billion pounds, compared to June’s estimate of 2.648 billion. The average 2008/09 farm price was placed at $.32, compared to $.5203 for 2007/08.

2009/10 soybean meal ending stocks were reported at 300,000 short tons, unchanged from June. Following the revisions to soybean production and crush estimates, production is projected at 39.935 million short tons, with total supply now pegged at 40.400 million. Domestic use is estimated at 30.900 million short tons and exports are pegged at 9.200 million, taking total use to 40.100 million short tons. The average 2009/10 farm price is seen at $255 to $315 per short ton, compared to June’s range of $275 to $335.

2008/09 soybean meal ending stocks came out at 300,000 short tons, compared to 294,000 late in 2007/08. The average farm price is pegged at $320 per short ton, compared to $335.94 in 2007/08.

2009/10 world wheat ending stocks were placed at 181.28 million tons, compared to 182.65 million in June’s update. Production is seen at 656.48 million tons and exports are pegged at 124.0 million tons, both up modestly from last month. Decreases in production estimates for Argentina, Canada and the European Union were offset by increases in the Middle East, India and the former Soviet Union.

2009/10 world corn ending stocks came out at 139.17 million tons, compared to 125.46 million in June. Global production is seen at 789.83 million tons, up more than 8 million from last month following an increased projection for the U.S. Exports are pegged at 81.76 million tons and feed use is seen at 483.28 million tons, both up from last month.

2009/10 world soybean ending stocks were reported at 51.83 million tons, up 810,000 from June. Production is estimated at 243.73 million tons, compared to 241.67 million last month on expectations for a bigger U.S. crop. The crush and export projections were also up on the month at 201.29 million tons and 75.86 million tons, respectively.

John Sanow goes over the numbers (4 Minutes, 16 Seconds, MP3)