Market News

USDA lowers world crop production projections

USDA’s lowered its world new crop production estimates for corn, soybeans, and wheat.

World wheat is now seen at 665.33 million tons as lower estimates for the U.S., Canada, China, and most of the former Soviet Union, excluding Ukraine, canceling out an increase for the European Union. USDA also tightened world wheat ending stocks and lowered the feed and export use estimates.

The global corn crop is seen at 905.23 million tons, down more than 44.5 million from last month on the big drop in the U.S. production estimate. USDA did increase its production outlooks for Canada and the European Union. World corn ending stocks were lowered more than 20 million tons to 134.09 million, while exports and feed use estimates also declined from June.

The world soybean crop is pegged at 267.16 million tons, a little bit smaller than a month ago on the lower U.S. estimate. The global supply, crush, and export estimates were also lowered slightly.

Breakdown of USDA supply and demand tables:

2012/13 U.S. wheat ending stocks came out at 664 million bushels, compared to 694 million in June and 743 million for 2011/12. Analysts were expecting stocks to be around 725 million bushels. USDA lowered production 10 million bushels to 2.224 billion and with beginning stocks increased 15 million, total supply is estimated at 3.087 billion bushels. Food use was raised 5 million bushels to 950 million and feed and residual use was lowered 20 million to 200 million, putting domestic use at 1.223 billion bushels. With exports now at 1.2 billion bushels, total use is projected at 2.423 billion bushels. The average 2012/13 farm price is estimated at $6.20 to $7.40 per bushel, compared to June’s range of $5.60 to $6.80 and the 2011/12 estimate of $7.24 per bushel.

2011/12 U.S. corn ending stocks are estimated at 903 million bushels, compared to 851 million last month and 1.128 billion last year. Before the report, estimates ranged from 750 million to 905 million bushels, for an average of 840 million bushels. Feed and residual use is seen at 4.550 billion bushels, with food, seed and industrial use at 6.455 billion, and ethanol at 5.050 billion, for total domestic use of 11.005 billion bushels, down from the 2010/11 marketing year. Export use is projected at 1.600 billion bushels. With less than a quarter left in the 2011/12 marketing year, the average farm price is estimated at $6.10 to $6.30 per bushel, compared to the 2010/11 final of $5.18.

2012/13 U.S. corn ending stocks are seen at 1.183 billion bushels, compared to the average pre-report guess of 1.232 billion and June’s projection of 1.881 billion. USDA slashed production by more than 1.8 billion bushels and doubled imports to 30 million, putting total supply at 13.903 billion bushels. Feed and residual use is estimated at 4.8 billion bushels and food, seed and industrial use is pegged at 6.320 billion with ethanol at 4.9 billion bushels, taking domestic use down 755 million bushels to 11.120 billion. USDA lowered exports 300 million bushels to 1.6 billion, leaving total use at 12.720 billion bushels. The average 2012/13 farm price is estimated at $5.40 to $6.40 per bushel, compared to June’s range of $4.20 to $5.

2011/12 U.S. soybean ending stocks are estimated at 170 million bushels, down 5 million on the month and matching the average pre-report estimate; the range ran from 145 million to 200 million bushels. 2010/11 U.S. soybean ending stocks were 215 million bushels. USDA has old crop crushings at 1.675 billion bushels, exports at 1.340 billion, and total use at 3.116 billion bushels. The average 2011/12 farm price is estimated at $12.40 per bushel, compared to the 2010/11 average of $11.30.

2012/13 U.S. soybean ending stocks are pegged at 130 million bushels, compared to 140 million last month. Before the report, expectations ranged from 95 million to 176 million, for an average of 134 million bushels. With old crop ending stocks slightly tighter and a lower production estimate, total supply is seen at 3.235 billion bushels. The crush is projected at 1.610 billion bushels, down 35 million, exports are estimated at 1.370 billion, a cut of 115 million, and residual use was lowered 1 million to 35 million bushels, taking total supply to 3.105 billion bushels. The average 2012/13 farm price is estimated at $13 to $15 per bushel, compared to the month ago range of $12 to $14.

2011/12 U.S. soybean oil ending stocks are projected at 2.660 billion pounds, compared to 2.425 billion the previous marketing year. Production is pegged at 19.450 billion pounds, with imports at 185 million for a total supply of 22.060 billion pounds. Domestic disappearance is placed at 18.1 billion pounds and exports are estimated at 1.3 billion for total use of 19.4 billion pounds. The average 2011/12 farm price is estimated at $.5175 per pound, compared to the 2010/11 estimate of $.5320.

2012/13 U.S. soybean oil ending stocks are seen at 2.005 billion pounds, compared to 2.135 billion last month. With USDA expecting a smaller soybean crop, production is projected at 18.4 billion pounds and the total supply is pegged at 21.255 billion. Domestic disappearance is expected to be 18 billion pounds, down 200 million on the month, and with exports unchanged at 1.250 billion, total use is seen at 19.250 billion pounds. The average 2012/13 farm price is estimated at $.5250 to $.5650 per pound, unchanged from last month.

2011/12 U.S. soybean meal ending stocks are estimated at 300,000 short tons, down 50,000 from the end of 2010/11 due to increases in all demand categories. The average 2011/12 farm price is estimated at $365 per short ton, compared to $345.52 the previous marketing year.

2012/13 U.S. soybean meal ending stocks are pegged at 300,000 short tons, unchanged on the month. Following USDA’s reduced soybean production estimate, production is expected to be 38.335 million short tons, down 800,000 from June, putting total supply at 38.8 million. Domestic disappearance was lowered 500,000 short tons to 30.4 million and exports were cut 300,000 to 8.1 million, taking total use to 38.5 million short tons. The average 2012/13 farm price is estimated at $365 to $395 per short ton, compared to June’s range of $335 to $365.

2012/13 world wheat ending stocks are projected at 182.44 million tons, compared to 185.76 million a month ago. Production was lowered 6.73 million tons to 665.33 million on reduced estimates for the U.S., Canada, China, and the former Soviet Union, excluding Ukraine, which canceled out an increase for the European Union. Domestic feed use is pegged at 130.33 million tons, compared to 131.67 million last month, and exports are seen at 134.71 million tons, compared to 135.42 million in June.

2012/13 world corn ending stocks are estimated at 134.09 million tons, down sharply from June’s projection of 155.74 million. Global production is pegged at 905.23 million tons, compared to 949.93 million a month ago as the big drop in the U.S. estimate more than cancels out modest rises for Canada and the European Union. Domestic feed use is expected to be around 553.31 million tons, compared to 535.95 million a month ago, and exports are anticipated at 98.30 million tons, compared to 105.32 million last month.

2012/13 world soybean ending stocks are seen at 55.66 million tons, compared to 58.54 million last month. World production is estimated at 271.03 million tons, compared to 271.03 million tons a month ago due to the lower U.S. production guess. Domestic crush use is pegged at 232.39 million tons, down from the 234.05 million last month, and export demand is projected at 95.82 million tons, compared to 96.71 million in June.