USDA numbers show recovery in global soybean demand
The latest USDA World Agricultural Supply and Demand Estimates report shows that the soybean market continues to tighten while corn numbers were virtually unchanged. Old crop soybean exports were increased by 20 million bushels, reflecting a continuing recovery in global soybean demand, especially in China. Soybean crush was also increased by 15 million bushels as meal use has picked up. Those changes lower 2011/12 ending stocks to 175 million bushels.
Looking ahead to the 2012/13 marketing year, production for 2012 was left unchanged, but soybean demand for the new crop was lowered by 20 million in exports and 10 million bushels in crush. That leaves 2012/13 ending stocks at 140 million bushels, down 5 million from last month. The midpoint of the 2012/13 season-average price range remains at $13/bu.
In corn, all of the adjustments were for the old crop. Ethanol demand was raised 50 million bushels, based on the latest ethanol data as ethanol production has been stronger than expected. But exports were lowered 50 million bushels to offset as shipments continue to lag. That leaves 2011/12 ending stocks unchanged at 851 million bushels. So the market is still looking at the potential for a 14.79 billion bushel corn crop for 2012, and the midpoint of the 2012/13 marketing year remains at $4.60/bu., according to USDA.
"Pre-report estimates had lower corn stocks and high soybean stocks, so the report is slightly bearish for corn and bullish for soybeans," Iowa State University economists say.
Internationally, China has shifted additional land from soybeans to corn, notes Iowa State University’s Iowa Farm Outlook. Brazil’s 2011 soybean crop was increased by 0.5 million tons, while Argentina’s crop was decreased by 1 million tons. China and Brazil also had larger 2011 corn crops than previously estimated, ISU economists say. Global trade for corn in the coming year is expected to pick up, but production for the rest of the world is expected to capture that increase, the economists add.