Pro Farmer Reaction to USDA July Reports

July 11, 2012 03:39 AM
 

** WHEAT PRODUCTION **

  • ALL WHEAT: 2.224 billion bu.; trade expected 2.253 billion bu.
    -- compares to 1.999 billion bu. in 2011
  • ALL WINTER WHEAT: 1.670 billion bu.; trade expected 1.668 bil. bu.
    -- compares to 1.494 billion bu. in 2011
  • HRW: 1.010 billion bu.; trade expected 1.010 billion bu.
    -- compares to 780 million bu. in 2011
  • SRW: 429 million bu.; trade expected 426 million bu.
    -- compares to 458 million bu. in 2011
  • WHITE WINTER: 232 million bu.; trade expected 229 million bu.
    -- compares to 256 million bu. in 2011
  • SPRING WHEAT: 472 million bu.; trade expected 492 million bu.
    -- compares to 455 million bu. in 2011
  • DURUM WHEAT: 82 million bu.; trade expected 88 million bu.
    -- compares to 50.5 million bu. in 2011


USDA's first all-wheat crop estimate came in 29 million bu. below the average trade guess. The national average wheat yield is put at 47.7 bu. per acre.

The initial spring wheat crop estimate came in 20 million bu. less than traders were anticipating. USDA estimates the spring wheat yield at 40.4 bu. per acre, up 2.7 bu. from last year.

The initial durum wheat estimate was 6 million bu. less than expected, with the average yield estimated at 38.6 bu. per acre -- up 0.1 bu. from last year.


** 2011-12 U.S. CARRYOVER **

  • CORN: 903 million bu.; up from June est. of 851 million bu.
    -- compares to 1.128 billion bu. in 2010-11
  • BEANS: 170 million bu.; down from June est. of 175 million bu.
    -- compares to 215 million bu. in 2010-11
  • WHEAT: 743 million bu.; up from June est. of 728 million bu.
    -- compares to 862 million bu. in 2010-11
  • COTTON: 3.3 million bales; up from June est. of 3.2 million bales
    -- compares to 2.6 million bales in 2010-11

USDA raised its old-crop corn estimate by 52 million bu. from last month, which was 63 million bu. above the average, pre-report guess. On the supply side, USDA increased estimated corn imports by 2 million bushels. On the demand side, USDA trimmed estimated exports by 50 million bu. to 1.6 billion bushels. USDA now sees an average on-farm cash price of $6.10 to $6.30, up 15 cents on the bottom end of the range and a nickel higher on the top.

Old-crop soybean carryover was cut 5 million bu. from last month. USDA made no changes on the supply side of the balance sheet. On the demand side, USDA increased estimated crush by 15 million bu. to 1.675 billion bu., estimated exports by 5 million bu. to 1.34 billion bu. and seed use 2 million bushels. Partly offsetting those increases was a 17-million-bu. reduction in estimated residual "use." USDA now estimates the average on-farm cash price at $12.40, up a dime from last month.

Old-crop wheat carryover was increased 15 million bu. from last month, which was known via the June Grain Stocks Report. To get there, USDA increased old-crop wheat imports by 5 million bu. and cut seed use 2 million bu., feed and residual use 11 million bu. and exports 7 million bushels. USDA put the 2011-12 average on-farm cash price at $7.24, down a penny from last month's estimate.

USDA raised its old-crop cotton carryover estimate by 100,000 bales from last month. The only change to the balance sheet was a 100,000-bale reduction in estimated domestic use. USDA left its average on-farm cash price at 91.0 cents.


** 2012-13 U.S. CARRYOVER **

  • CORN: 1.183 billion bu.; down from June proj. of 1.881 billion bu.
  • BEANS: 130 million bu.; down from June proj. of 140 million bu.
  • WHEAT: 664 million bu.; down from June proj. of 694 million bu.
  • COTTON: 4.8 million bales; down from June proj. of 4.9 million bales

For the new-crop corn balance sheet there were major changes from month-ago. USDA slashed total use by 1.753 billion bu. on the combination of a lower projected production and higher projected beginning stocks (old-crop carryover). USDA now projects the national average yield at 146 bu. per acre -- down 20 bu. from last month. USDA says, "The projected corn yield was lowered to reflect expected impacts of persistent and extreme June and early July dryness and heat across the central and eastern Corn Belt. Only partly offsetting the slash to the supply side was a 1.055-billion-bu. cut to projected new-crop use. USDA slashed projected feed and residual use by 650 million bu. to 4.8 billion bu., projected food seed and industrial use by 105 million bu. (100 million bu. of the reduction was in projected ethanol grind) to 6.32 billion bu. and projected exports by 300 million bu. to 1.6 billion bushels. USDA now projects an average on-farm average price of $5.40 to $6.40, up $1.20 on the bottom end of the range and $1.40 higher on the top end.

For soybeans, USDA lowered its new-crop total supply projection by 160 million bu. from last month due to slightly lower beginning stocks and a drop in the national average yield projection to 40.5 bu. per acre -- down 3.4 bu. per acre from the June projection. On the demand side, USDA cut its total use projection by 150 million bushels. Projected crush was lowered 35 million bu. to 1.61 billion bu. and projected exports were lowered 115 million bu. to 1.37 billion bushels. USDA also lowered projected residual use by 1 million bushels. USDA now sees an average on-farm cash price of $13.00 to $15.00, up $1.00 on both ends of the range.

USDA cut its new-crop wheat carryover projection by 30 million bu. from last month. Total supply was increased 5 million bu. amid a combination of bigger beginning stocks and reduced production. On the demand side, USDA increased food use by 5 million bu. to 950 million bu and raised projected exports by 50 million bu. to 1.2 billion bushels. That was partially offset by a 20-milllion-bu. reduction to projected feed and residual use. USDA now sees an average on-farm cash price of $6.20 to $7.40 -- up 60 cents on both ends of the range.

For cotton, the new-crop total supply projection was increased by 100,000 bales due to bigger beginning stocks. On the demand side, USDA cut projected domestic use by 100,000 bales, but increased projected exports by 300,000 bales. The net result was a 100,000-bale cut to projected new-crop cotton carryover. USDA left its average on-farm cash price projection at 60.0 cents to 80.0 cents.



** 2011-12 GLOBAL CARRYOVER **
  • CORN: 129.37 MMT; up slightly from June proj. of 129.19 MMT
    -- projection of 134.09 MMT for 2012-13; down sharply from 155.74 MMT in June
  • BEANS: 52.51 MMT; down from June proj. of 53.36 MMT
    -- projection of 55.66 MMT for 2012-13; down from 58.54 MMT in June
  • WHEAT: 197.18 MMT; up from June proj. of 195.56 MMT
    -- projection of 182.44 MMT for 2012-13; down from 185.76 MMT in June
  • COTTON: 66.68 mil. bales; down from June proj. of 67.32 mil. bales
    -- projection of 72.39 mil. bales for 2012-13; down from 74.51 mil. bales in June


** 2011-12 GLOBAL PRODUCTION HIGHLIGHTS **

  • ARGENTINA BEANS: 41.0 MMT; compares to 41.5 MMT in June
    -- projection of 55.0 MMT for 2012-13
  • BRAZIL BEANS: 65.5 MMT; compares to 65.5 MMT in June
    -- projection of 78.0 MMT for 2012-13
  • ARGENTINA WHEAT: 14.5 MMT; compares to 14.5 MMT in June
    -- projection of 12.0 MMT for 2012-13
  • AUSTRALIA WHEAT: 29.5 MMT; compares to 29.5 MMT in June
    -- projection of 26.0 MMT for 2012-13
  • CHINA WHEAT: 117.92 MMT; compares to 117.4 MMT in June
    -- projection of 118.0 MMT for 2012-13; down from 120.0 MMT in June
  • CANADA WHEAT: 25.26 MMT; compares to 25.26 MMT in June
    -- projection of 26.6 MMT for 2012-13; down from 27.0 MMT in June
  • EU-27 WHEAT: 137.38 MMT; compares to 137.38 MMT in June
    -- projection of 133.14 MMT for 2012-13; up from 131.01 MMT in June
  • RUSSIA WHEAT: 56.23 MMT; compares to 56.23 MMT in June
    -- projection of 49.0 MMT for 2012-13; down from 53.0 MMT in June
  • FSU-12 WHEAT: 114.42 MMT; compares to 114.42 MMT in June
    -- projection of 88.56 MMT for 2012-13; down from 94.76 MMT in June
  • CHINA CORN: 192.78 MMT; compares to 192.78 MMT in June
    -- projection of 195.0 MMT for 2012-13
  • ARGENTINA CORN: 21.0 MMT; compares to 21.0 MMT in June
    -- projection of 25.0 MMT for 2012-13
  • SOUTH AFRICA CORN: 11.5 MMT; compares to 11.5 MMT in June
    -- projection of 13.0 MMT for 2012-13
  • BRAZIL CORN: 70.0 MMT; compares to 69.0 MMT in June
    -- projection of 67.0 MMT for 2012-13
  • CHINA COTTON: 33.5 mil. bales; compares to 33.5 mil. bales in June
    -- projection of 30.5 mil. bales for 2012-13



** MARKET REACTION **

Corn, soybean and wheat futures rallied into the report and have extended gains after USDA's data was released. Corn is currently showing gains in the teens, while soybeans are mostly 25-plus cents higher. Wheat futures are posting gains from 11 to 17 cents at all three exchanges.


 

 


Back to news

Comments

 

Rate this News Article:

Spell Check

No comments have been posted to this News Article

Close