by Linda H. Smith, DTN Markets Editor
WASHINGTON (DTN) — DTN Analyst John Sanow on Thursday noted that if there was a surprise in USDA’s supply and demand report, it would be on the bearish side. The report delivered on that observation, with U.S. and world ending stocks all up from November estimates and most over year-earlier levels as well.
For U.S. Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/…
USDA’s Crop Production report can be found at: http://usda.mannlib.cornell.edu/…
U.S. SUPPLY – DEMAND
Corn: Contrary to trade expectations, 2011-12 ending stocks rose 5 million bushels from the November estimate rather than falling by that amount. The reduction appeared in the food/seed/industrial category, though the ethanol portion of that usage was left unchanged.
USDA reduced its national average cash price estimate from $6.70 to $6.40.
Soybeans: U.S. soybean ending stocks rose to 230 mb from November’s 195 mb estimate as exports fell 25 mb and crush, 10 mb. The trade expected an increase, but only to 213 mb.
USDA reduced its price estimate to $12.60 to $11.70.
Wheat: U.S. wheat ending stocks for 2011-12 rose 50 mb from November’s estimate, to 878 mb, due to reduced prospects for exports caused by competition from several major exporting countries and relatively strong domestic prices, supported by the tight domestic corn balance. That is 16 mb from last year, but down 98 million from the recent high in 2009-10. The 2011-12 season-average farm price is lowered slightly to $7.05 to $7.55 per bushel compared with $7.05 to $7.75 last month.
“On the domestic side of the balance sheet, corn stocks-to-use remained unchanged at 6.7{fe867fa2be02a5a45e8bbb747b653fe2e9d0331fd056b85cd0c1a3542435a96e}, beans jumped to 7.6{fe867fa2be02a5a45e8bbb747b653fe2e9d0331fd056b85cd0c1a3542435a96e} and wheat to a whopping 41.7{fe867fa2be02a5a45e8bbb747b653fe2e9d0331fd056b85cd0c1a3542435a96e},” Sanow said.
WORLD ENDING STOCKS
Corn: Global corn production for 2011-12 is projected at a new record of 867.5 million tons, despite the U.S. drop from 2010. Foreign corn production is estimated at 43.4 million tons above last year, with China’s production a record 191.8 mmt, up 7.3 million tons from a month earlier.
Ending stocks rose from 121.6 mmt to 127.2 mmt, down a million from 2010 crop year, which also was tightened slightly from November estimates.
Soybeans: USDA pegged world soybean stocks at 64.5 million tons, up from last month’s 63.6, but that is still down from 2010-crop ending stocks, now pegged at 68.4 million tons.
Wheat: Global wheat supplies for 2011-12 are projected 9.3 million tons higher on larger carry-in in Australia and Argentina and a 5.7-million-ton increase in foreign production. Global wheat production for 2011-12 is projected at a record 689.0 million tons, with larger crops in Australia, Argentina, Canada and China.
“As mentioned in the report preview, chances for numbers to come in more than expected came to fruition, particularly on the world side,” Sanow said. “This in turn took stocks-to-use up for corn (14.6{fe867fa2be02a5a45e8bbb747b653fe2e9d0331fd056b85cd0c1a3542435a96e}), beans (24.8{fe867fa2be02a5a45e8bbb747b653fe2e9d0331fd056b85cd0c1a3542435a96e}) and wheat (30.7{fe867fa2be02a5a45e8bbb747b653fe2e9d0331fd056b85cd0c1a3542435a96e}).”
“This morning’s numbers could pressure the market at the open, and if traders decide to focus on the world numbers for all three grains coupled with the domestic numbers for beans and wheat, solid losses could be the result,” Sanow said.
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Posted with DTN Permission by Haylie Shipp
