WASDE: More corn and less wheat in the bins
Apr 12, 2010
The USDA updated the U.S. and World 2009/10 balance sheet estimates for major agricultural commodities in the World Agricultural Supply and Demand Estimates (WASDE) report on Friday. After the March WASDE and USDA Planting Report, grain prices have been very volatile. Traders were hoping for good news out of the April WASDE to help solidify grain prices. U.S. corn ending stocks increased slightly, within preliminary forecasts, and U.S. wheat ending stocks decreased 5% to mark below 1 billion bushels once again, according to the WASDE.
U.S. corn ending stocks were increased 100 million bushels to 1.899 billion bushels. The increase in ending stocks was due to a decrease in feed and residual use, estimated by USDA. Although there was a record use corn for January ethanol production, ethanol usage remained unchanged because of lower gasoline usage in the U.S. The USDA narrowed its 2009/10 farm price for corn by 5 cents to $3.50 to $3.70 per bushel.
World corn production was increased by 2.0 million tons on an increase in production in Brazil and South Africa. The regions have seen favorable growing conditions.
Favorable planting conditions should exist over the next 10 days across much of the Corn Belt, allowing farmers to get an early start on planting corn. Temperatures should remain above their normal averages and precipitation should be held below normal averages this week, besides in the extreme northwest region of the Corn Belt. These conditions may affect upcoming USDA estimates and corn prices.
U.S. wheat ending stocks were decreased by 51 million bushels to 950 million bushels. The 5% decrease in ending stocks was due to higher domestic use and an increase in exports of 40 million bushels. Feed use of wheat increased as well. Wheat’s 2009/10 marketing year estimated price was narrowed by 5 cents by the USDA to $4.85 to $4.95.
World wheat supplies estimates remained unchanged in the report because of a small production increase that offset a decrease in ending stocks.
Estimated exports of U.S. soybeans increased by 25 million bushels. The increase puts U.S. soybean exports 13% above the 2008/09 record, even with an exceptional crop coming in South America. Soybean stocks remained unchanged in the U.S. while the farm price for the 2009/10 soybean crop was narrowed by 25 cents to $9.20 to $9.70 per bushel.
Worldwide Soybean production estimates were increased by 1.6 million tons to 257.5 million tons on late season favorable weather conditions in Argentina and Brazil.
The USDA increased corn ending stocks and decreased wheat ending stocks like many had been expecting. The decrease in wheat ending stocks to bring them back below 1 billion bushels was important for wheat prices. Soybean prices could strengthen on the positive news that exports had increased even with the good South American crop. We will look to planting reports as the 2010 planting season progresses.
Click on the link for the full WASDE report: http://www.usda.gov/oce/commodity/wasde.
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