WASDE: Minimal Changes to Balance Sheet
Dec 11, 2012
The USDA's December WASDE held few surprises as market participants look past the WASDE and into the holiday season. Corn and soybean balance sheets showed little change. Global wheat supplies were increased due to a jump in production. Prices were lowered for all three grains.
U.S. corn balance sheets were unchanged for December, but price outlooks were lowered, based heavily on reported prices from farmers. Through October, farmers received prices that were well below cash market bids. Corn season-average farm price has been lowered to $6.80-$8.00 per bushel.
The unchanged balance sheet came as a slight surprise as analyst pre-report estimates had an increase in 2012/13 U.S. ending stocks, due mainly to decreased export demand. The stocks-to-use ratio remains at a staggering 5.8%.
Global coarse grain supplies in 2012/13 were estimated to increase 7.0 million tons, mostly due to a larger than expected corn crop from China. Estimates from the National Bureau of Statistics estimates China's corn production has increased 8.0 million tons due to complimentary rainfall and incentive, due to prices, to plant more acres.
U.S. soybean exports for 2012/13 were unchanged at 1.345 billion bushels. U.S. 2012/13 ending stocks were decreased by 10 million bushels to 130 million bushels. The 2012/13 average soybean price was lowered by $0.35 on both ends of the range to $13.55 to $15.55 per bushel.
Global soybean production was projected up 0.1 million tons to 267.7 million tons, due to increased production from Canada.
2012/13 U.S. wheat ending stocks were increased by 50 million bushels to 754 million. Slower shipment pace and stronger than expected competition lowered 2012/13 wheat exports again, by 50 million bushels. The season average wheat price for 2012/13 was projected lower to $7.70 to $8.30 per bushel.
Global wheat supplies were estimated 1.6 million tons higher as world production was increased by 3.7 million tons.
The Holidays are approaching, which means January 1 is around the corner and many issues will need to be addressed including the Fiscal Cliff, Farm Bill, and Crop Insurance. For agriculture news and research, visit www.farmlandforecast.com.