COARSE GRAINS: U.S. corn ending stocks are unchanged this month as a projected increase in corn use for ethanol is offset by a reduction in expected feed and residual use.
Corn used to produce ethanol is raised 50 million bushels as strong blender incentives and positive ethanol producer margins continue to encourage expansion in ethanol production and use. Rising gasoline prices have pulled ethanol prices higher helping to offset increases in corn feedstock costs for ethanol producers.
U.S. corn feed and residual use is lowered 50 million bushels as increased prospects for 2011 SRW wheat production and higher year-to-year corn plantings in the South reduce expected corn feed and residual disappearance during the second half of the 2010/11 corn marketing year. SRW wheat plantings are up sharply year-to-year with the March 31 Prospective Plantings report further increasing acreage in the SRW wheat states. A weighted average of early April crop conditions in the SRW states shows the highest percent of the crop in good-toexcellent condition in 5 years.
Winter wheat conditions are especially favorable in Arkansas and North Carolina where wheat feeding is an alternative for poultry and hog producers. Cash and futures prices for SRW wheat have recently dropped below those for corn on a pound-forpound basis creating opportunities for wheat to replace higher priced corn in feeding rations.
Prospects for early new-crop corn usage ahead of September 1 are also increased with the largest intended southern corn plantings since 2007 and high expected summer corn prices.
Other 2010/11 U.S. feed grain changes this month include higher feed and residual use and higher food, seed, and industrial use for sorghum which boost expected domestic usage 15 million bushels. Sorghum exports, however, are projected 10 million bushels lower. Oats imports are raised slightly and feed and residual use is projected lowered leaving ending stocks up 18 million bushels. Price ranges for all the feed grains are narrowed 5 cents per bushel on each end. The season-average corn price is projected at $5.20 to $5.60 per bushel.
Global coarse grain supplies for 2010/11 are projected 6.3 million tons higher this month with a 1.8-million-ton increase in beginning stocks and a 4.5-million-ton increase in production. Higher corn and barley beginning stocks in Iran account for most of the increase in carryin. Nearly half of the increase in coarse grain production reflects upward revisions to sorghum production in a number of Sub-Saharan African countries. Increases in millet production for countries in this same region add 1.4 million tons to global coarse grain output.
Global corn production is raised 1.2 million tons with the biggest increases for Brazil, Uganda, and Paraguay. Production for Brazil is raised 2 million tons with higher reported area and yields for their primary summer crop and an increase in reported plantings for their winter crop.
A 0.5-million-ton increase for Uganda corn is part of a number of revisions for African countries this month. Production for Paraguay is raised 0.4 million tons as favorable growing season weather boosted yields. Production is lowered 1.3 million tons for Indonesia and 0.5 million tons each for Egypt and South Africa.Global 2010/11 corn trade is up slightly this month with imports raised 0.9 million tons for Indonesia and 0.5 million tons for China.
The increase in expected China imports reflects the short-term decline in world corn prices in mid-March that created a buying opportunity for Chinese importers. No official confirmation of such purchases has yet been made. Corn imports are lowered 0.4 million tons for Canada based on the slow pace of U.S. shipments to date. Corn exports are raised 1.5 million tons for Brazil and 0.3 million tons for Paraguay with increased production and supplies in both countries. Exports are lowered 0.5 million tons each for South Africa and Thailand.
Global corn consumption is increased 3.1 million tons with increases in feeding for China, Brazil, and Thailand, and increased food, seed, and industrial use for China and for several African countries where corn is a food staple. Projected global corn ending stocks are lowered 0.7 million tons.