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Hedging Corn and Soybeans

RSS By: Howard Tyllas, AgWeb.com

Howard Tyllas is currently a member of the Chicago Board of Trade and registered with the Commodity Futures Trading Commission as a floor broker and as a Commodity Trading Advisor.

WASDE FOR 6/9/11

Jun 09, 2011

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WASDE for 6/9/11


Note: Because spring planting is still underway in the Northern Hemisphere and remains several months away in the Southern Hemisphere, these

projections are highly tentative. National Agricultural Statistics Service (NASS) forecasts are used for U.S. winter wheat area, yield, and

production. For other U.S. crops, methods used to project planted acreage, harvested acreage, and yield are noted on each table.

OILSEEDS: This month's U.S. oilseed supply and use projections for 2011/12 include higher beginning and ending stocks and reduced exports.

Although adverse weather has slowed soybean planting progress this year, area and production estimates are unchanged with several weeks

remaining in the planting season. Higher beginning stocks reflect a lower export projection for 2010/11. Soybean exports for 2010/11 are

reduced 10 million bushels to 1.54 billion bushels reflecting the export pace to date for the marketing year and reduced global import demand,

led mainly by lower projected imports for China. Soybean ending stocks for 2010/11 are projected at 180 million bushels, up 10 million. U.S.

soybean exports for 2011/12 are reduced 20 million bushels to 1.52 billion, reflecting increased competition from South America resulting from

an increase in the recently harvested Brazilian soybean crop. With larger supplies and reduced exports, ending stocks for 2011/12 are increased

30 million bushels to 190 million. Other changes for 2010/11 include reduced soybean oil used for biodiesel production, reduced projected food

use of soybean oil, and lower soybean oil exports, all resulting in increased ending stocks for 2010/11 and 2011/12.

Soybean, meal, and oil prices are all raised this month. Led by higher corn prices, the U.S. season-average soybean price for 2011/12 is

projected at $13.00 to $15.00 per bushel, up $1.00 on both ends of the range. Soybean meal prices for 2011/12 are projected at $375 to $405

per short ton, up 25 dollars on both ends of the range. Soybean oil prices are projected at 58 to 62 cents per pound, up 2 cents on both ends of

the range.

Global oilseed production for 2011/12 is projected at 456.9 million tons, down 2.3 million from last month, mainly due to lower rapeseed

production. EU-27 rapeseed production is reduced 1.2 million tons to 18.8 million mainly due to lower yields resulting from dry conditions in April

and May in major producing areas of France and Germany. Rapeseed production for Canada is lowered 0.5 million tons to 13.0 million due to

reduced area planted resulting from excessive moisture this spring. China soybean production is reduced 0.5 million tons to 14.3 million

reflecting lower area as producers shifted to corn. Other changes include increased sunflowerseed production for Russia, and reduced

cottonseed production for Australia, Pakistan, and the United States. Brazil's 2010/11 soybean production is increased 1.5 million tons to a

record 74.5 million, reflecting yield and production increases reported in the most recent government survey.WHEAT: U.S. wheat supplies for 2011/12 are lowered this month as reduced carryin more than offsets an increase in expected production.

Beginning stocks are lowered 30 million bushels with a 10-million-bushel reduction in imports and a 20-million-bushel increase in exports for

2010/11, both based on the pace of shipments to date. All wheat production for 2011/12 is forecast at 2,058 million bushels, 15 million higher

than last month. The winter wheat production forecast is raised 26 million bushels with higher forecast yields for Hard Red Winter, Soft Red

Winter, and Soft White Winter wheat. Partly offsetting is a projected 11-million-bushel reduction for durum and other spring wheat production as

seedings are projected 290,000 acres lower. Flooding and persistent wet soils have delayed planting in North Dakota and Montana well beyond

the normal planting window.

U.S. wheat usage for 2011/12 is unchanged. Ending stocks are projected 15 million bushels lower at 687 million bushels, but remain above the

10-year average. The 2011/12 season-average farm price for all wheat is projected at a record $7.00 to $8.40 per bushel, up 20 cents on both

ends of the range, reflecting both tighter domestic supplies and higher expected corn prices. The forecast 2010/11 wheat farm price is also

raised this month, up 5 cents per bushel to $5.70 per bushel.

Global wheat supplies for 2011/12 are projected slightly lower this month as an increase in beginning stocks is more than offset by lower

production. Global beginning stocks are projected 4.9 million tons higher mostly reflecting increased stocks in Russia as feeding is reduced 2.0

million tons and 5.0 million tons, respectively, for 2009/10 and 2010/11. Beginning stocks for 2011/12 are also raised 0.5 million tons each for

Argentina and Canada with the same size reductions in 2010/11 exports for each country. Partly offsetting is a 1.5-million-ton decrease for

2011/12 beginning stocks for Australia with higher 2010/11 exports.

World wheat production is projected 5.2 million tons lower for 2011/12. At 664.3 million tons, production would be the third highest on record and

up 16.1 million from 2010/11. This month's reduction for 2011/12 mostly reflects a 7.1-million-ton decrease for EU-27 wheat output. Persistent

dryness, particularly in France, but also in Germany, the United Kingdom, and western Poland, has reduced yield prospects for EU-27.

Production is also reduced 1.0 million tons for Canada as flooding and excessive rainfall, particularly in southeastern Saskatchewan and

adjoining areas of Manitoba, are expected to reduce spring wheat seeding. Production is increased 1.5 million tons for Argentina and 0.5 million

tons for Australia, both reflecting favorable planting conditions and strong producer price incentives to expand area. Production is also raised 0.5

million tons for Pakistan as increased use of higher quality seed and adequate water supplies resulted in higher-than-expected yields.
Global wheat trade for 2011/12 is projected slightly higher reflecting a 0.5-million-ton increase in expected imports by EU-27. Exports are

lowered 3.0 million tons for EU-27. Export increases of 2.0 million tons and 1.0 million tons, respectively, for Australia and Argentina offset the

EU-27 reduction. Exports are raised 0.3 million tons for Pakistan with the larger crop. Global wheat consumption is projected down 3.3 million

tons, mostly reflecting a 2.5-million-ton reduction in EU-27 domestic use.

Wheat feeding is lowered 0.5 million tons for Canada. Global ending stocks for 2011/12 are projected 3.0 million tons higher as decreased

wheat feeding in earlier years raise projected stocks in Russia, more than offsetting declines in Australia and EU-27.

COARSE GRAINS: Projected U.S. feed grain supplies for 2011/12 are sharply lower with reduced prospects for corn acreage. Corn planted

area for 2011/12 is lowered 1.5 million acres from March intentions to 90.7 million acres. Planting delays through early June in the eastern Corn

Belt and northern Plains are expected to reduce planted area, more than offsetting likely gains in the western Corn Belt and central Plains where

planting was ahead of normal by mid-May. Harvested area is lowered 1.9 million acres, to 83.2 million with the additional 400,000-acre reduction

reflecting early information about May flooding in the lower Ohio and Mississippi River valleys and June flooding along the Missouri River valley.

Production is projected at 13.2 billion bushels, down 305 million from last month, but still a record, and up 753 million from 2010/11.

U.S. feed grain usage changes for 2011/12 include a 100-million-bushel projected decline in corn feed and residual use and a 5-million-bushel

increase in sorghum exports. Feed grain ending stocks are sharply lower with expected corn ending stocks down 205 million bushels to 695

million. Corn ending stocks are projected 35 million bushels lower than beginning stocks indicating a stocks-to-use ratio of 5.2 percent

compared with the 2010/11 forecast ratio of 5.4 percent. The 2011/12 season-average farm price for corn is projected at a record $6.00 to

$7.00 per bushel, up 50 cents on both ends of the range. Projected farm prices are also raised for the other feed grains.

Global coarse grain supplies for 2011/12 are projected down 7.8 million tons this month with lower beginning stocks and production. Reduced

U.S. corn production, lower EU-27 barley production, and reduced corn beginning stocks in China, more than offset increases in China corn

production. EU-27 barley production is lowered 2.2 million tons as prolonged dryness across western and northern Europe has sharply reduced

yield prospects in the major producing countries. China corn area is raised for 2010/11 in line with the most recent official government area

estimates with the year-to-year percentage increase for 2011/12 largely maintained.

China corn production increases 5.0 million and 6.0 million tons, respectively, for 2010/11 and 2011/12 with yields unchanged month-to-month.

More than offsetting the higher production levels is higher estimated corn consumption for both feeding and industrial use. China corn

consumption is raised 8.0 million tons and 13.0 million tons, respectively, for 2010/11 and 2011/12. Together these changes leave projected

2011/12 corn ending stocks down 12.0 million tons for China. At the projected 51.0 million tons, China's stocks would be down 2.7 million tons

from 2010/11 and just below the levels of the preceding 2 years, better reflecting the continuing rise in domestic corn prices as production

struggles to keep pace with rising usage. Although China's stocks represent 46 percent of the world total for 2011/12, China is not expected to

be a significant exporter.

Global 2011/12 corn trade is raised slightly this month with higher imports for EU-27 and higher exports for Ukraine. Ukraine exports are raised

1.0 million tons with higher production and stronger expected demand from EU-27. Russia exports are lowered 0.5 million tons with lower

production. Other important trade changes this month include a 0.2-million-ton increase in sorghum imports by Mexico, driving the U.S. export

increase, and a 1.5-million-ton reduction in EU-27 barley exports with lower production and tighter supplies. Barley imports are lowered for Saudi

Arabia and China. Global corn ending stocks for 2011/12 are projected down sharply this month, falling 17.3 million tons mostly reflecting the

usage revisions in China. The projected 5.2-million-ton drop in U.S. ending stocks accounts for most of the rest of the decline. Global corn stocks

are projected at 111.9 million tons, the lowest since 2006/07.

RICE: U.S. 2011/12 rice total supply and use are both lowered from last month and result in an overall decrease in ending stocks. U.S. 2011/12

rice production is projected at 199.5 million cwt, down 11.5 million (-5.5%) from last month due entirely to a decrease in planted area. This is the

smallest crop since 2007/08. Long-grain production is lowered 10.5 million cwt to 134.0 million, while combinedmedium-and short-grain production is lowered 1.0 million to 65.5 million. All rice planted area is lowered 168,000 acres (-5.6%) to 2.85 million

due to the impact of Mississippi River Delta flooding in the mid-South with long-grain rice in Arkansas and Missouri accounting for most of the

decline. The planting intentions estimate published in Prospective Plantings on March 31 at 3.018 million acres is adjusted downward based

primarily on analysis of satellite data conducted by the Foreign Agriculture Service and with analysis performed by the rice Interagency

Commodity Estimates Committee. Harvested area at 2.83 million acres is calculated based on the average harvested-to-planted ratios by rice

class for the period 2006/07 through 2010/11. The projected yield is calculated from the 5-year Olympic average (2006/07-2010/11) by rice

class. The all rice average yield is projected at 7,040 pounds per acre, up fractionally from last month. The increase is due to the changing

weights by rice class (lower share of long-grain and higher share of relatively higher yielding medium/short-grain). Beginning stocks of all rice for

2011/12 are raised 1.0 million cwt based on a change in the 2010/11 balance sheet-the 2010/11 export forecast is lowered to 113.5 million

cwt.

The 2011/12 total use projection is lowered 4.0 million cwt to 232.0 million due to decreases in both domestic and residual use and in exports.

Domestic and residual use is reduced 1.0 million cwt to 126.0 million, and exports are lowered 3.0 million cwt-all in long-grain rice-to 106.0

million. Smaller exports are expected in 2011/12 to markets in the Middle East, Sub-Saharan Africa, and the Western Hemisphere. The rough

rice export projection is reduced 1.0 million cwt to 39.0 million, and combined milled and brown rice (on a rough-equivalent basis) is lowered 2.0

million to 67.0 million. Ending stocks for 2011/12 are projected at 42.1 million cwt, down 6.5 million or 13 percent from a month ago, and down

14.5 million or 26 percent from 2010/11.

The 2011/12 long-grain U.S. season-average farm price is projected at $11.30 to $12.30 per cwt, up 30 cents per cwt on each end of the range.

The combined medium- and short-grain price is projected at $15.00 to $16.00 per cwt, unchanged from a month ago. The 2011/12 all rice price

is projected at $12.20 to $13.20 per cwt, up 20 cents per cwt on each end of the range.

Global 2011/12 rice supply and use are lowered from a month ago. Global production is projected at a record 456.4 million tons, down 1.5 million

from last month's forecast, primarily due to a decrease for China. Additionally, production projections are raised for Egypt and Guyana, but

lowered for the United States and Cuba. China's 2011/12 rice crop is projected at 138.0 million tons, down 2.0 million from a month ago;

primarily due to the impact of prolonged drier-than-normal weather in the Yangtze River Valley affecting mostly early rice. Egypt's crop is

increased 0.9 million tons to 4.0 million due to a 33 percent increase in area-based on a recent report from the Agricultural Counselor in Cairo.

The global import and export forecasts for 2011/12 are little changed from last month. Global consumption for 2011/12 is lowered 0.8 million

tons, primarily due to lower consumption expected in China, but partially offset by increases for Egypt, EU-27, and Vietnam. Global ending stocks

for 2011/12 are projected at 94.9 million tons, down 1.3 million from last month, due primarily to reductions for China and the United States which

are partially offset by increases for Egypt, the Philippines, and Vietnam.

SUGAR: Projected U.S. sugar supply for fiscal year 2011/12 is increased 171,000 short tons, raw value, from last month mostly due to higher

imports from Mexico. Total 2011/12 U.S. sugar use is unchanged.
Mexico's 2010/11 ending stocks are increased due to the larger 2010/11 import quota. Mexico's 2011/12 exports are increased reflecting

increased carryin supplies.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2011 total meat production is raised from last month reflecting higher beef production.

Large cattle placements and larger cow slaughter, due in part to drought in the Southern Plains, is reflected in an increase in the beef production

forecast. However, forecasts for pork and poultry are reduced from last month as higher forecast grain prices are expected to trim hog weight

gains and put additional pressure on broiler producers. USDA's Quarterly Hogs and Pigs report to be released June 24 will provide an indication

of producer farrowing intentions for the remainder of the year. For 2012, meat production forecasts are reduced as higher forecast feed costs

pressure hog weights and slow the expected recovery of the poultry sector. Higher feed prices are expected to slow feedlot placements as

producers keep cattle on forage longer. The egg production forecast for 2011 is raised on stronger second half production, but the forecast for

2012 is reduced on higher feed prices and less demand for hatching eggs.

Export forecasts for red meat and poultry are raised from last month. Beef exports for 2011 are forecast higher on strength in a number of

markets and expected improvements in exports to Mexico. Pork, broiler, and turkey exports were larger than expected in the first quarter and the

forecasts for the remainder of 2011 are raised. Beef and turkey exports are raised for 2012, but no changes are made to pork or broiler exports.
Cattle and broiler prices for 2011 are lowered from last month on weaker-than-expected demand but hog prices are unchanged. Broiler prices

are lowered for 2012.

The milk production forecast for 2011 is raised. Producers are expected to continue to expand herds through the middle of the year and although

herds may begin to decline toward the end of the year, cow numbers are expected to be above 2010. However, higher feed costs will impact

profitability and the dairy cow inventory is expected to decline in 2012. Tighter feed supplies will also likely impact the rate of increase of milk per

cow. As a result, the milk production forecast for 2012 is reduced from last month. Commercial exports are forecast higher for 2011 largely due

to stronger expected cheese exports. However, imports of cheese and milk proteins have been stronger than expected and the import forecast

for both 2011 and 2012 is raised.


Dairy product price forecasts are raised from last month. Butter supplies are tight and demand for cheese, nonfat dry milk (NDM), and whey are

expected to support product prices. Class III and Class IV price forecasts are raised from last month in line with the increased product prices.

The all milk price is forecast at $19.65 to $20.05 per cwt for 2011. Price forecasts for 2012 are also raised as the smaller production increase is

expected to support higher product and Class prices. The all milk price is forecast at $17.75 to $18.05 per cwt for 2012.

COTTON: This month's 2011/12 U.S. cotton supply and demand estimates include offsetting revisions which leave ending stocks unchanged

from last month. Beginning stocks are raised 500,000 bales, reflecting lower estimated exports for 2010/11. Production is reduced 1.0 million

bales to 17.0 million, due mainly to expected higher abandonment resulting from the increased severity of the drought in the Southwest. With

lower available U.S. supplies and marginally lower world imports, exports are reduced 500,000 bales to 13.0 million. The stocks-to-use ratio of

15 percent is above 2010/11, but remains the second lowest since 1995/96. The projected range for the marketing year average price received

by producers is unchanged from last month at 95 to 115 cents per pound.

Changes to the 2011/12 world projections primarily reflect higher beginning stocks, lower production in the U.S. and lower consumption by

China. In addition to the substantial decrease in the U.S. crop, production is reduced in Uzbekistan, but is raised in Mexico and Turkey. Forecast

consumption by China is reduced 500,000 bales, as the recent slow pace of imports indicates sluggish demand now and early in the new

marketing year. Similar to the U.S., China's projected stocks-to-use ratio, if realized, would be the second smallest in 22 years. Imports are

reduced for Hong Kong, Mexico, Pakistan, and others, while exports are reduced for the U.S. and Uzbekistan, but raised for Australia and Brazil.

World ending stocks are raised marginally.

This month's most significant changes to the 2010/11 estimates are lower trade-especially lower imports by China and lower exports by the

U.S.-and lower estimated consumption by China and India. The estimated range for the U.S. marketing-year average price received by

producers of 81 to 83 cents per pound is lowered one cent on the upper end of the range.
Approved by the Secretary of Agriculture and the Chairperson of the World Agricultural Outlook Board, Gerald A. Bange, (202) 720-6030. This

report was prepared by the Interagency Commodity Estimates Committees.

May Weather Summary

Unusually cool weather across the northern Plains and much of the West contrasted with above-normal temperatures in the South and East.

Toward month's end, an intense, early-season heat wave built across the South, while favorable warmth overspread the Midwest, while extremely

cool weather persisted in California and neighboring areas.

Incessantly wet conditions accompanied the cool weather across the northern Plains, slowing winter wheat development, hampering summer

crop planting, and triggering widespread flooding in the middle and upper Missouri Valley. By June 5, more than one-quarter of the spring wheat

had not yet been planted in North Dakota (69 percent planted) and Montana (73 percent).

In stark contrast, drought worsened across the southern High Plains and the Deep South. In both regions, dry, increasingly hot weather severely

stressed pastures and rain-fed summer crops. By June 5, at least half of the rangeland and pastures were rated in very poor to poor condition in

every southern-tier state from Arizona to Florida, excluding Alabama. On the southern Plains, drought resulted in early maturation of the winter

wheat crop and promoted a rapid harvest pace. Ironically, flood-control efforts extended into drought-affected areas of the lower Mississippi alley

during May, as water from the earlier inundation of the Ohio Valley and the Mid-South worked its way downstream.

Farther north, producers in the eastern Corn Belt and far upper Midwest continued to battle wetness in an effort to plant corn and soybeans. By
June 5, corn planting was just 58 percent complete in Ohio, while Midwestern soybean planting had not surpassed the halfway mark in Michigan

(50 percent planted), Indiana (49 percent), North Dakota (47 percent), and Ohio (26 percent). However, in Midwestern areas where corn and

soybeans had emerged, crops benefited from frequent showers and late-May warmth.

Elsewhere, cool, showery weather in California, the Great Basin, and the Northwest slowed fieldwork and crop development. Chilly conditions

also delayed the Western melt season, leaving substantial high-elevation snow still on the ground by month's end - except in drought-affected

areas of the Southwest.

May Agricultural Summary

Unusually cool temperatures blanketed much of the western half the United States during May, delaying fieldwork and slowing the emergence

and development of some small grains and row crops. Most notably, average temperatures in portions of the Pacific Northwest and northern

Great Plains and Rocky Mountains were as many as 8 degrees below normal. Elsewhere, hot, dry weather in Texas adversely affected row crop

planting, as well as crop development and condition. Limited rainfall throughout the Southeast left many producers waiting for improved soil

moisture levels before planting their crops, while others put seed in the ground to meet insurance deadlines. Conversely, above average

precipitation in the Corn Belt, Great Plains, Ohio Valley, and Rocky Mountains limited small grain and row crop planting in many areas.

With rain-drenched fields throughout much of the Corn Belt, Great Lakes region, and the Ohio Valley limiting fieldwork activities during April,

producers had planted just 4 percent of the Nation's corn crop by May 1, fifty-three percentage points behind last year and 27 percentage points
behind the 5-year average. A week of near-normal temperatures and little to no rainfall allowed for an increased planting pace during the week

ending May 8. In Iowa, producers worked long hours for much of the week, planting 61 percent, or nearly 8.5 million acres, of their intended 2011

crop. Favorable weather conditions continued throughout much of the latter half of May, allowing producers ample time to plant their crop and

promoting rapid emergence across much of the major growing regions. Conversely, persistently wet weather severely limited fieldwork in Ohio

for much of the month, leading to a major planting delay at month's end. By May 29, planting was complete or nearing completion in many States,

and emergence had advanced to 66 percent complete, 17 percentage points behind last year and 12 percentage points behind the 5-year

average. Overall, 63 percent of the corn crop was reported in good to excellent condition on May 29, compared with 76 percent from the
same time last year.

As May began, sorghum producers in Texas were planting irrigated fields in the High Plains, while a lack of rainfall and less than adequate soil
moisture levels in many dryland fields in other areas of the State caused planting delays. Nationally, 30 percent of this year's crop was planted by
May 8, compared with 33 percent last year and a 5-year average of 29 percent. Despite scattered showers, the planting pace in Kansas was

steady mid-month with progress slightly ahead of last year and normal. By May 29, forty-six percent of the sorghum crop was planted, on par with

last year but 3 percentage points behind the 5-year average.

Wet weather continued to limit fieldwork for producers in many of the major oat-producing regions of the country as the month began. By May 1,

seeding was complete in 45 percent of the Nation's oat fields with 35 percent of the crop emerged, 27 and 10 percentage points behind the 5-

year average, respectively. Improved weather conditions in Minnesota, Ohio, Pennsylvania, and Wisconsin allowed for increased seeding mid-

month; however, progress remained well behind both last year and normal. Crop emergence remained steady following the increased seeding

pace. By May 29, producers had sown 89 percent of the Nation's oat crop, 10 percentage points behind the 5-year average. Emergence was

behind normal in all major estimating States except Iowa and Texas, where progress was complete or nearly complete. With activity limited to

Iowa, Nebraska, Ohio, and Texas, 27 percent of the oat crop was headed by May 29, slightly behind both last year and the 5-year average. In
Texas, heading was nearly complete and producers had harvested 59 percent of their crop. Overall, 56 percent of the oat crop was reported in

good to excellent condition, compared with 78 percent from the same time last year.

As rain, snow, and below average temperatures further delayed the start of fieldwork in North Dakota, the largest barley-producing State,

producers Nationwide had seeded just 18 percent of this year's crop by May 1, thirty-three percentage points behind last year and 25 percentage

points behind the 5-year average. Fields began to dry out and weather conditions improved mid-month, allowing producers in North Dakota time

to begin seeding fields, while cool temperatures in portions of the Pacific Northwest and northern Rocky Mountains limited crop development. By

May 29, seeding advanced to 72 percent complete, compared with 96 percent last year and a 5-year average of 95 percent, and thirty-nine

percent of the barley crop was emerged, 38 percentage points behind both last year and the 5-year average.

One-third of the winter wheat crop was at or beyond the heading stage as May began, ahead of both last year and the 5-year average. Above

average temperatures and unusually dry conditions in areas of the central and southern Great Plains promoted rapid crop development, but

negatively impacted crop conditions throughout much of the month. While head development gained speed in the Midwest as warmer

temperatures prevailed mid-month, flooding and soggy fields caused a decline in crop conditions in Arkansas and Illinois. Cool, damp weather in

the Pacific Northwest and northern Great Plains and Rocky Mountains slowed crop development, pushing overall progress behind the average

pace for the first time this season during the week ending May 22. By May 29, heading of the winter wheat crop had advanced to 72 percent

complete, slightly behind last year and 4 percentage points behind the 5-year average. As May ended, harvest was underway in a limited number

of States. In Oklahoma, producers had harvested 45 percent of this year's crop, well ahead of both last year and normal. Overall, 33 percent of

the winter wheat crop was reported in good to excellent condition on May 29, compared with 34 percent on May 1 and 65 percent from the same

time last year.

With cool, wet weather limiting fieldwork, seeding progress was behind both last year and normal in the six major spring wheat-producing States

as May began. As weather conditions improved mid-month, fieldwork activities increased and producers were able to seed more of their crop.

Double-digit progress was evident in all States except North Dakota during the week ending May 15. Nationally, 68 percent of the crop was

seeded by May 29, twenty-six percentage points behind last year and 27 percentage points behind the 5-year average. Emergence in Montana

and North Dakota, accounting for nearly 62 percent of the country's crop, was 40 percentage points or more behind last year and 44 percentage

points or more behind normal due to cool, wet weather that had limited fieldwork, as well as crop growth.

By May 1, rice producers had seeded 49 percent of the Nation's crop, 28 percentage points behind last year and 17 percentage points behind

the 5-year average. While producers in California took advantage of warm, sunny weather and seeded 55 percent of their crop in the 14 days

ending May 15, a series of strong, early-month storm systems dumped heavy rainfall on much of Arkansas and Missouri, limiting seeding

progress to 18 percent or less during the same two weeks. Emergence remained steady behind the seeding pace. Seeding was nearly

complete in Texas and the lower Delta by May 22. In contrast, double-digit progress was evident in California and the upper
Delta. By May 29, producers had seeded 94 percent of the rice crop, 4 percentage points behind last year and slightly behind the 5-year

average. In Missouri, some intended acreage was unable to be seeded due to poor field conditions and the lateness of the season. Overall, 53

percent of the rice crop was reported in good to excellent condition on May 29, compared with 74 percent from the same time last year.

Planting was underway in all but four of the 18 major soybean-producing States by May 8, although progress, at 7 percent complete, was 21

percentage points behind last year and 10 percentage points behind the 5-year average. While planting was most advanced in the Delta, one of

the most significant delays was evident in Mississippi where flooding along the Mississippi River left many fields under water. Favorable weather

conditions in Illinois and Iowa allowed for rapid planting progress mid-month. By May 22, emergence was evident in 12 percent of soybean fields

across the country. By May 29, fifty-one percent of soybean crop was planted, 20 percentage points behind both last year and the 5-year

average. Emergence had advanced to 27 percent complete, 16 percentage points behind last year and 12 percentage points behind the 5-year

average. Emergence was most advanced in the lower Delta, while adverse weather conditions in earlier weeks had limited crop development in

the upper Delta.

With planting most advanced in Texas, 8 percent of this year's peanut crop was in the ground as May began, 2 percentage points behind last

year but slightly ahead of the 5-year average. With the exception of Florida, where unusually dry soils limited progress, favorable weather

conditions in most States promoted a rapid fieldwork pace mid-month. In Georgia, producers made good late-month progress despite dry soil

conditions. By May 29, seventy-seven percent of the peanut crop was planted, slightly behind last year but 3 percentage points ahead of the 5-

year average.

By May 22, sunflower planting was underway in the four major estimating States and had advanced to 11 percent complete by May 29, well

behind both last year and the 5-year average. Adverse weather conditions earlier in the season delayed the start of spring fieldwork in many

areas.

As the month began, heavy irrigation was run in cotton fields in southern Texas, while producers in the Northern High Plains waited for increased

soil temperatures before planting their crop. With improved weather conditions providing ample time for fieldwork, planting gained speed mid-

month as double-digit progress was evident in 12 of the 15 major cotton-producing States. Squaring was underway in portions of the cotton crop

in many fields in southern Texas by May 15. Hot, windy conditions left many Texas producers scrambling to provide enough irrigation to recently

planted fields during the latter half of the month. By May 29, producers had planted 73 percent of this year's cotton crop, 4 percentage points

behind last year and 3 percentage points behind the 5-year average. Toward month's end, producers in areas of the High Plains were treating

their fields for thrips, while high winds and hot temperatures damaged some recently emerged cotton.

With soggy field conditions and steady spring rainfall limiting fieldwork in Minnesota and North Dakota, producers in the four major sugarbeet-

producing States had planted 15 percent of the Nation's crop by May 1, eighty percentage points behind last year and 46 percentage points

behind the 5-year average. With improved weather conditions helping to dry wet fields, planting gained speed mid-month. By May 29, planting

had advanced to 92 percent complete, 8 percentage points behind last year and 7 percentage points behind
the 5-year average.

Crop Comments

Winter wheat: Production is forecast at 1.45 billion bushels, up 2 percent from the May 1 forecast but down 2 percent from 2010. Based on June

1 conditions, the United States yield is forecast at 45.3 bushels per acre, up 0.8 bushel from the previous forecast but down 1.5 bushels from last

year. Expected grain area totals 32.0 million acres, unchanged from last month. As of May 29, thirty-three percent of the winter wheat crop in the

18 major producing States was rated in good to excellent condition, 32 points below the same week in 2010, and heading had reached 72

percent, 4 percentage points behind the 5-year average.

Forecasted head counts from the objective yield survey in the six Hard Red Winter States (Colorado, Kansas, Montana, Nebraska, Oklahoma,

and Texas) are below last year's level in all States except Oklahoma. Improved weather conditions during the past month in the Upper Great

Plains resulted in higher forecasted yields. Harvest had begun in Oklahoma, Texas, and southern Kansas.

Forecasted head counts from the objective yield survey in the three Soft Red Winter States (Illinois, Missouri, and Ohio) are all above last year's

levels. Wet conditions in Ohio lowered yield expectations from last month. If realized, yield in North Carolina will be a new record high and the

Michigan yield will equal the record high.

Forecasted head counts from the objective yield survey in Washington are above last year. The percent of the crop headed in the Pacific

Northwest was behind the 5-year average in Idaho, Oregon, and Washington. Yield forecasts increased from last month in Oregon and

Washington despite rust concerns.

Durum wheat: Production of Durum wheat in Arizona and California is forecast at a collective 23.5 million bushels, up 1 percent from May and up

14 percent from last year. The cooler than normal growing season in California has set harvest slightly behind normal. If realized, California's yield

of 110.0 bushels per acre will tie last year's record high yield.

Sugarbeets: Production of sugarbeets for the 2010 crop year is revised to 31.9 million tons, down slightly from the January end-of-season

estimate but 7 percent above 2009. Planted area totaled 1.17 million acres while harvested area totaled 1.16 million acres, both unchanged from

the previous estimate. The United States yield, at 27.6 tons per acre, is also unchanged from the previous estimate but up 1.7 tons per acre from

the record high set in 2009 making the 2010 crop yield a new record. Record high yields for the 2010 crop
were achieved in Colorado, Minnesota, North Dakota, and Wyoming.

Sugarcane: Production of sugarcane for sugar and seed in 2010 is revised to 27.4 million tons, down 3 percent from the March estimate and

down 10 percent from 2009. Area harvested for sugar production totaled 877,500 acres for sugar and seed for the 2010 crop year, down 5,700

acres from March but up 3,600 acres from the previous year. Yield for sugar and seed is estimated at 31.2 tons per acre, down 0.6 ton from the

previous estimate and down 3.6 tons from 2009.

Production of sugarcane for sugar is revised to 25.7 million tons, down 3 percent from the March estimate and 10 percent below 2009. Area

harvested for sugar production totaled 825,300 acres, down 4,400 acres from the previous estimate but up 8,300 acres from last year. Yield of

sugarcane for sugar is revised to 31.1 tons per acre, down 0.7 ton per acre from March and
3.8 tons per acre below 2009.

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Howard Tyllas

Tel.1-312-573-2699, 1-312-823-9189

Disclaimer: No guarantee of any kind is implied or possible where projections of future conditions are tempted. Futures trading involve risk.In no event should the content of this be construed as an express or implied romise, guarantee or implication by or from Howard Tyllas, that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.

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