The USDA updated the U.S. and World 2008/09 and 2009/10 balance sheet estimates for major agricultural commodities in the World Agricultural Supply and Demand Estimates (WASDE) report on Wednesday. Typically the March report receives little attention, but all eyes were focused on this month's report due to the resurvey of last fall's harvest. The resurvey included Illinois, Michigan, Minnesota, and Wisconsin. North and South Dakota will be resurveyed at a future date.
Forecasted U.S. corn production estimates were decreased by 20 million bushels to a revised 13.1 billion bushels. The USDA decreased the 09/10 yield forecast for corn to 164.9 bushels per acre from the record 165.2 bushels per acre. Wheat ending stocks were increased by 20 million bushels, while soybean ending stocks were decreased by 20 million bushels, according to the report.
Estimated U.S. corn ending stocks were increased by 80 million bushels by the USDA on a decrease of exports by 100 million bushels due to an increase in foreign supplies. The average U.S. corn yield was adjusted to 164.9 bushels per acre from 165.2 bushels per acre. The decreased yield still makes for a record year. The USDA reduced its 2009/10 farm price for corn by 20 cents to $3.45 to $3.75 per bushel.
World corn production was increased by 5.9 million tons because of a 3.8 million ton increase from Argentina and a 2 million ton increase from South Africa. Both countries experienced limited amounts of damaging heat during the growing season. The increase was partially offset by India’s small reduction in corn production.
U.S. wheat ending stocks were increased by 20 million bushels on a decrease of food use. The increase in ending stocks pushed total ending stocks to over 1 billion bushels. "This would be the first time the wheat carryover has exceeded 1 billion bushels in over 20 years," GrainAnalyst.com market watcher Vic Lepinasse expressed on the increase of ending stocks. Wheat’s 09/10 marketing year estimated price was increased by 5 cents by the USDA to $4.80 to $5.00.
World wheat supplies estimates were increased by 2.1 million tons on a 2.1 million ton increase of Russia’s beginning stocks.
The estimated 2009/10 U.S. soybean ending stocks were decrease by 20 million bushels to 190 million bushels because of increased soybean exports. Exports were increased by 20 million bushels to a record 1.42 billion bushels. In addition, Brazil’s soybean production was increased by 1 million tons to a record 67 million tons on higher than expected yields. The farm price for the 2009/10 soybean crop was narrowed to $8.95 to $9.95 per bushel.
The USDA decreased corn yields and production like we forecasted, but the adjustments were not as large as some had hoped for. Grain markets were responding modestly to the report on Wednesday. We will pay attention to flood reports until plating season arrives, which could affect the planted acreage of crops.