WASDE: Corn Demand Weighs on Stocks
May 09, 2014
U.S. corn demand continues to rise as export estimates in May have increased 150 million bushels following a 125 million bushel increase in the April WASDE. The corn stocks-to-use ratio has dropped from 9.9% in April to 8.4% in May. Soybean and wheat estimates were mostly unchanged for the 2013/14 marketing year.
May's report took a first look at the 2014/15 supply and demand estimates; these estimates should not be taken heavily into consideration due to an abundance of production risks. The USDA's estimate for corn yield was 165.3 bushels per acre, assuming optimal growing conditions. With an already slow start to the U.S. growing season, this yield number could change on a daily basis for better or worse. The most intriguing estimate to take away would be the expected soybean planted acres versus the expected corn planted acres. Soybean planted acres were estimated at a record 81.5 million acres and if moisture continues to delay planting, more acres could be allocated towards soybeans.
U.S. corn ending stocks for the 2013/14 marketing year were projected 185 million bushels lower to 1.146 billion bushels, due primarily to increased export and ethanol demand. Exports for U.S. corn in the 2013/14 marketing year were increased by 150 million bushels to 1.900 billion bushels.
For the 2014/15 marketing year, U.S. corn ending stocks were projected to be 1.726 billion bushels due to another record crop. U.S. exports were estimated at 1.700 billion bushels with total usage of 13.385 billion bushels. Projected total production was 13.935 billion bushels. U.S. corn use for ethanol in 2014/15 was unchanged as gasoline consumption is expected to remain flat in 2015. The 2014/15 season-average farm price for corn was estimated at $3.85 to $4.55 per bushel, compared to $4.50 to $4.80 per bushel for 2013/14.
U.S. Soybean exports for 2013/14 were raised 20 million bushels to 1.600 billion bushels. Ending stocks were slightly revised down to 130 million bushels from 135 million bushels in April. The stocks-to-use ration remains at a record low of 3.8%.
For the 2014/15 marketing year, U.S. soybean ending stocks were projected to be 330 million bushels. Exports were estimated at 1.625 billion bushels with total usage of 3.450 billion bushels. Projected soybean yield was 45.2 bushels per acre with total production a record 3.635 billion bushels due to increased yields and harvested area. The 2014/15 season-average farm price for soybeans was estimated at $9.75 to $11.75 per bushel, compared to $13.10 per bushel for 2013/14.
U.S. wheat ending stocks for 2013/14 were unchanged at 583 million bushels. Exports were increased 10 million bushels to 1.185 billion bushels.
For the 2014/15 marketing year, U.S. wheat supplies were projected at 540 million bushels, a 43 million bushel decrease from 2013/14 due to lower stocks, imports, and production. This is the lowest ending stocks prediction since the 2007/08 marketing year. The 2014/15 all wheat average price was estimated at $6.65 to $7.95 per bushel.
The 2014/15 projections need to be taken with a grain of salt as risks to planting, growing, and harvesting are plentiful. The Corn Belt has already seen a delay in corn and soybean planting due to increased moisture. The Wheat Belt has seen dry and drought like weather since the beginning of May that farmers believe could be disastrous to the winter wheat that will be harvested in late spring. With so many questions to be answered, we look forward to the middle of planting season and what Mother Nature has to offer.