South America's corn crop, already expected to rebound from last year's drought, is even bigger than earlier estimates, according to USDA's March supply and demand report released early Wednesday.

USDA released its latest Crop Production and World Agricultural Supply and Demand Estimates reports Wednesday morning. (Logo courtesy of USDA)USDA raised estimates of corn production in Argentina in both the 2008/09 and 2009/10 totals, taking world ending stocks for both years higher. The world numbers may overshadow the small revisions the department made in 2009 corn and soybean production following a re-survey in some states where harvest was unusually late.

The reports should be considered bearish for corn and wheat when trade resumes later this morning, said DTN Senior Analyst Darin Newsom. The revision in 2009 soybean production could be considered bullish for soybeans, though market reaction could be determined by a far more bearish world situation, Newsom said.

As a result of the re-survey of producers in four corn states and four soybean states, USDA cut the corn crop by 20 million bushels and the soybean crop by 2 million bushels.

Incorporating those changes as well as some changes in usage, USDA raised projections of ending stocks for corn and wheat, and cut projections of soybeans ending stocks.

CROP PRODUCTION, DECEMBER STOCKS REVISIONS

USDA now tallies 2009 corn production at 13.131 billion bushels, down from 13.151 b bu in the 2009 annual production report that was released Jan. 12. The decrease is a result of a survey USDA conducted of producers in Illinois, Michigan, Minnesota and Wisconsin. USDA still intends to re-survey producers in North and South Dakota, but has not yet set a date for that.

As a result of the re-survey, USDA said corn harvested area declined 10,000 acres in Michigan, but was unchanged in the other three states. Yields in both Illinois and Minnesota decreased 1.0 bushel per acre; yields in Michigan and Wisconsin were unchanged. The revisions took U.S. yields to 164.9 bpa, down from 165.2 bpa in the Jan. 12 report.

A re-survey of soybean producers in Georgia, North and South Carolina and Virginia led to a decrease in 2009 soybean production to 3.359 billion bushels, down from 3.361 billion bushels in the January report.

Soybean harvested area was reduced 10,000 acres in Georgia, 20,000 acres in North Carolina and 5,000 acres in South Carolina, but was unchanged in Virginia. Yields decreased 0.5 bpa in South Carolina and 1.0 bpa in Virginia, but were unchanged in the other two states. U.S. yield remained at 44.0 bpa.

USDA made small adjustments to the Dec. 1 Stocks report, to reflect the results of the re-survey. Dec. 1 corn stocks were revised to 10.914 billion bushels, down 20 million bushels, and Dec. 1 soybeans stocks are now reported at 2.335 billion bushels, down 2 m bu.

U.S. SUPPLY AND DEMAND REVISIONS

In monthly supply and demand tables, USDA's World Agricultural Outlook Board increased corn and wheat ending stocks, and lowered soybean ending stocks.

Corn ending stocks for the 2009/10 marketing year are expected to total 1.799 billion bushels, up 80 million bushels from February. USDA lowered exports by 100 m bu, more than offsetting the cut in production. Projected marketing year average farm price is lowered 20 cents on the top end of the range, to $3.45 to $3.75 per bushel.

Soybean ending stocks are now expected to total 190 million bushels, down from 210 million bushels in the February report, on a 20-m bu increase in exports and a 10-m bu increase in crush. The season-average price range was narrowed to $8.95 to $9.95 per bushel.

Ending stocks for wheat rose 20 million bushels, to 1.001 billion bushels as there was a reduction in expected food use of 20 m bu.

"Wheat ending stocks were abominably bearish," Newsom said. "This is like a judge passing a sentence of life plus one year. This would also be the highest U.S. ending stocks number since the 1987-1988 marketing year."

All wheat exports remained unchanged, although there were changes within some classes. Season-average wheat prices were raised 5 cents, to $4.80 to $5.00.

WORLD PRODUCTION AND STOCKS CHANGES

In the world tables, USDA increased estimates for both 2008/09 and 2009/10 corn, soybeans and wheat.

World 2009/10 soybean stocks are now pegged at 60.67 million metric tons. Brazil soybean production was raised 1 MMT to 67 MMT; Argentina remained at 53 MMT. "This increase in overall soybean production pushed world ending stocks above 60 mmt and the ending stocks-to-use ratio to 25.7 percent, the highest since the 2006-2007 marketing year," Newsom said.

World corn 2009/10 ending stocks were increased 6.1 MMT, to 140.15 MMT. "This should be viewed as bearish," Newsom said. Argentina's 2009/10 crop is now expected to total 21.0 MMT, up from 17.2 MMT last month. The 2008/09 Argentine crop was hiked to 15.0 MMT, up from 12.6 MMT last month. Brazil was unchanged for both crop years.

World wheat ending stocks are now projected at 196.77 million metric tons, up from 195.86 MMT in February. "This puts the ending stocks-to-use ratio at 30.4 percent, the largest since the 2001-2002 marketing year," Newsom said.

Source: DTN - Posted by Kaci Switzer