WASDE, Exports Lower Corn and Soybean Stocks
Apr 09, 2014
The acceleration of U.S. soybean exports has put pressure on an already depleted stocks situation. The 2014 soybean stocks-to-use ratio has dropped from 4.4% in March to 4.0% this month. The estimated record Brazilian soybean crop was expected to take pressure off the U.S., but the drought that has plagued South America decreased production estimates for the largest soybean producer in the world. A supply relief is expected later in the year due to the increase in U.S. soybean planted acres reported in the March Prospective Plantings Report.
An interesting corn demand story has begun to develop as domestic feed use for the first half of the year is already 73% of the estimated total of 5.300 billion bushels. This is in line with the past three years, but recall that the summers of 2011 and 2012 experienced rising corn prices and tight supplies, and 2013 experienced unpredictable supply availability. In short, corn availability during the second half of the year was minimal during the last three years. If corn has a more steady availability through the summer months, usage should become more stable and increase above the projected 5.300 billion bushels.
U.S. corn ending stocks for the 2013/14 marketing year were projected 125 million bushels lower to 1.331 billion bushels, due primarily to increased export demand. Exports for U.S. corn in the 2013/14 marketing year were increased by 125 million bushels to 1.750 billion bushels. The season-average farm price for corn was raised 10 cents at the midpoint and the projected range was narrowed to $4.40 to $4.80 per bushel.
World corn production was increased by 6.4 million tons due to increases for Brazil, South Africa, and Russia.
U.S. Soybean exports for 2013/14 were estimated at 1.580 billion bushels, up 50 million bushels from last month reflecting the record pace of shipments and sales since the beginning of the year. Exports to China have already surpassed last year's marketing year record. Imports are expected to be a record 65 million bushels due to large expected shipments from South America in the second half of the marketing year.
Projected ending stocks for 2013/14 soybeans were lowered 10 million bushels to 135 million bushels and the stock-to-use ratio was 4.0%, compared to 4.5% last month. The 2013/14 season-average price range was raised 5 cents at the midpoint to $12.50 to $13.50.
Soybean production in Brazil was lowered to 87.5 million tons from 88.5 million tons, due to the drought affecting South America.
U.S. wheat ending stocks for 2013/14 were increased by 25 million bushels to 583 million. The ending stocks increase was attributed mainly to a reduction in feed and residual use. The season-average farm price for all wheat was unchanged at $6.75 to $6.95 per bushel.
Ending stocks were the highlight of this report as stocks dropped for both corn and soybeans, although the decreases were at the lower end of analysts estimated range. Global demand for U.S. corn and soybeans continues to grow and we will be tracking the export market in the second half of the year.
The coldest winter in over 30 years could keep farmers sidelined through the beginning of the planting season as cold and wet soil does not present optimal growing conditions for row crops. Final decisions will be made in the coming months on the crop to be planted and we will keep a keen eye on the corn to soybean planted ratio.
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