Demand For U.S. Corn, Soybeans Remain High

www.agrinews-pubs.com
Tom Doran
2010-06-18

Corn and soybean ending stocks projections continued their downward slide due to increased usage, according to the U.S. Department of Agriculture.

While the world supply-demand report kept the current U.S. feed grain production estimates for 2010-11 unchanged, the report noted reduced domestic feed grain supplies due to smaller carry-in for corn, sorghum and barley.

Corn food, seed and industrial use is projected 110 million bushels higher for 2010-11, mostly in line with higher projected corn use for ethanol, sweeteners and starch for 2009-10.

Higher use, combined with lower beginning stocks, drops projected 2010-11 corn ending stocks 245 million bushels to 1,573 million.

The season-average farm price for corn is projected 10 cents higher on both ends of the range to $3.30 to $3.90 per bushel. Projected 2010-11 farm prices for the other feed grains also are raised.

U.S. corn use for 2009-10 is projected 135 million bushels higher as increased FSI use more than offsets a reduction in expected feed and residual use.

Corn use for ethanol is raised 150 million bushels reflecting the continued record pace of ethanol production and usage through March based on the latest data from the Energy Information Administration.

Higher ethanol production also is supported by record production of gasoline blends with ethanol as indicated by weekly data from EIA through May and forecasts for rising gasoline demand during the summer driving season.

Corn use is raised 5 million bushels each for starch and glucose/dextrose as the gradual economic recovery spurs production of these products.

Feed and residual use is lowered 25 million bushels with increased availability of distillers’ grains.

U.S. corn ending stocks for 2009-10 are projected 135 million bushels lower. At 1,603 million bushels, this year’s ending stocks would be down 70 million from 2008-09.

The projected 2009-10 farm price for corn is lowered 5 cents on both ends of the range to $3.45 to $3.65 per bushel based on prices reported to date.

Global coarse grain supplies for 2010-11 are projected 5.3 million tons lower with the largest share of the decline resulting from lower expected corn carry-in in the United States.

Global coarse grain production for 2010-11 is lowered 1.4 million tons as higher corn production is more than offset by reductions in barley, oats, rye and mixed grains mostly reflecting reduced crop prospects in EU-27.

With reduced carry-in and increased consumption, global corn ending stocks are projected down 6.9 million tons. At 147.3 million tons, stocks are up 3.9 million tons from 2009-10, but just below those for 2008-09.

The June 10 report’s U.S. oilseed supply and use projections for 2010-11 included a small reduction in beginning and ending stocks. Lower beginning stocks reflect higher crush projections for 2009-10.

Soybean crush for 2009-10 is raised 5 million bushels to 1.74 billion reflecting an increase in projected soybean meal exports.

Soybean meal exports are projected at record 11.5 million short tons, almost 2 million above the previous record set in 1997-98.

Lower domestic soybean meal consumption partly offsets the increase in exports. Soybean ending stocks for 2009-10 are projected at 185 million bushels, down 5 million from last month.

Ending stocks for 2010-11 also are reduced 5 million bushels to 360 million.

Soybean, meal and oil price projections are unchanged this month. The U.S. season-average soybean price for 2010-11 is projected at $8 to $9.50 per bushel.

Soybean meal and oil prices for 2010-11 are projected at $230 to $270 per short ton and 34 to 38 cents per pound, respectively

Global oilseed production for 2010-11 is projected at 440.2 million tons, up 0.3 million from last month, mainly due to higher peanut production.

Brazil’s 2009-10 soybean production is increased 1 million tons to a record 69 million reflecting increased harvested area and record yields.

U.S. wheat supply projections saw a slight increase for 2010-11 in the USDA report as higher production was mostly offset by lower carry-in.

Winter wheat production is forecast 24 million bushels higher mostly on higher hard red winter wheat. Winter wheat yields were raised in the central and northern Plains and in the Pacific Northwest.

Beginning stocks are projected 20 million bushels lower as strong exports of wheat, flour and products during the final weeks of the old-crop marketing year boost 2009-10 exports 20 million bushels.

Domestic use for 2010-11 is projected 10 million bushels higher as lower prices encourage more wheat feeding. Ending stocks for 2010-11 are projected 6 million bushels lower, but remain up year-to-year and the highest since 1987-88.

The season-average farm price for all wheat is projected at $4 to $4.80 per bushel, down from $4.10 to $5.10 per bushel last month.

Recent declines in futures prices and lower-than-expected protein levels in hard red winter wheat have sharply reduced price prospects for many producers.

Global wheat supplies for 2010-11 are projected 4.1 million tons lower this month with reduced carry-in and production.

Global ending stocks are projected 4.2 million tons lower at 193.9 million tons. Global ending stocks for 2010-11 are expected to be up one million tons from beginning stocks.


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