USDA Reports Bearish for Corn and Wheat

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by Katie Micik, DTN Markets Editor

WASHINGTON (DTN) — USDA pegged the average corn yield at 122.8 bushels per acre, putting total production at 10.727 billion bushels, toward the high end of traders' expectations. That puts the ending stocks-to-use ratio at 6.5{6b02cb02835b82b7f756ddf6717aaab7139b350de274ea97f5b53eb230607107}, slightly higher than last month's 5.8{6b02cb02835b82b7f756ddf6717aaab7139b350de274ea97f5b53eb230607107} ratio.

USDA also trimmed the average soybean yield to 35.3, a 0.8 bpa drop. Production is expected to be 2.634 bb, down 2{6b02cb02835b82b7f756ddf6717aaab7139b350de274ea97f5b53eb230607107} from USDA's August estimate. The stocks-to-use ratio came in at 4.3{6b02cb02835b82b7f756ddf6717aaab7139b350de274ea97f5b53eb230607107}.

Grain sorghum production was trimmed slightly from August's estimates, going from 248 mb to 246.

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Crop Production report link: http://usda.mannlib.cornell.edu/

World Agricultural Supply and Demand Estimates (WASDE) link: http://www.usda.gov/

CORN

USDA tweaked the ending stocks number, pegging U.S. ending stocks for 2012-13 at 733 million bushels. Much of this increase came from additional beginning stocks. USDA adjusted 2011-12 feed and residual use downward by 150 million bushels, putting 2011-12 ending stocks at 1.181 bb.

USDA then increased feed and residual use for corn in 2012-13 by 75 mb, putting U.S. ending stocks at 733 mb versus its August estimate of 650 mb. The agency didn't adjust ethanol or export demand from August.

Globally, corn ending stocks for 2012-13 are expected to be 123.95 million metric tons, slightly higher than last month's estimate.

USDA left Argentina and Brazil's 2012-13 production unchanged, but slightly reduced Brazil's corn production for the prior year, lowering its estimate from 72.8 mmt to 72.7. mmt.

SOYBEANS

Domestic soybean ending stocks for 2012-13 were estimated at 115 mb, unchanged from its August estimate, although USDA did tweak how it arrived at 115 mb. The 2011-12 ending stocks number was adjusted downward by 15 mb. It found those 15 mb in 2012-13 crushings.

Global soybean stocks also tweaked for both growing seasons in the report. USDA upped 2011-12 ending stocks to 53.65 mmt from 51.94 mmt and decreased 2012-13 ending stocks from 53.38 in August to 53.1 in September. USDA also revised Brazil's 2011-12 production down by 1.1 mmt. It left 2012-13 South American production unchanged.

WHEAT

USDA did not release U.S. ending stocks for wheat in this report. Wheat's global ending stocks figure came in at 176.71, a slight decrease from August's 177.17 mmt. USDA also revised 2011-12 upwards to 198.64 mmt from 197.59 mmt.

Wheat production estimates for the FSU-12 countries was lowered by 4 million metric tons while Canadian production was left unchanged.

MARKET REACTION

“Traders view the U.S. reports as bearish for corn, bearish for wheat and neutral for soybeans,” said DTN Senior Analyst Darin Newsom. “Corn ending stocks for 2012-2013 increased to 733 mb, putting ending stocks to use at 6.5{6b02cb02835b82b7f756ddf6717aaab7139b350de274ea97f5b53eb230607107}, both well above what was expected. Wheat ending stocks were left unchanged rather than declining, yet the market is under initial pressure. Soybean ending stocks were projected at 115 mb, due to a 55 mb reduction in export demand.

“Global numbers were also bearish for corn with increases seen in both 2011-2012 and 2012-2013 ending stocks,” Newsom said. “Soybeans are neutral with 2011-2012 ending stocks increased while 2012-2013 ending stocks came down slightly. Wheat ending stocks were mixed with a slight increase seen in 2011-2012 and a slight decrease in 2012-2013 ending stocks.”

 

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Posted with DTN Permission by Haylie Shipp

 

 


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